RE:RE:You make some good points ... BlueCollar51 wrote: emba33 wrote: Hi BlueCollar51:
Thanks for your thoughful post. I think you make some excellent points, and it is a good balance against the convincing argument Dennis makes for the company.
Time will tell if the yield is safe here. I assume the new buses are necessary because of the rapid expansion. If Student Transportation can renew those new contracts and utilize the same older buses, there could be some opportunities to increase operating margins in the future.
What price to do think is the true value of this stock?
Emba33
The Book Value on 30 June 2015 = $2.08 USD x 1.3 = abt. $2.70 CAD
The Tangible Book Value on 30 June 2015 = $0.68 USD x 1.3 = abt. $0.88 CAD
The P/E is way out of whack for a company of this type in my opinion.
$3.00 CAD or less would be an attractive re-entry point for me.
The only reason STB trades at higher prices is due to the Unearned Dividend.
PS. goldsternp; The shareholders equity went up 15% and the share count went up 16%. How is that an improvement for the shareholders?
As Always; Do Your Own Due Diligence; It’s Your Money !!
Not surprising the book value is low with the model being used, and it isn't that much different than other companies using the same model. This company is basically a modified trust company designed to return $$ to the share owner. They all do some funky stuff in order to maintain their model. Cash flow is king.
As long as cash flow is available to distributre then it sounds like management is willing to share it with the share holders. It doesn't hurt that they are growing the cashflow as well :)
You think $3 CAD is an attractive entry point. What changed you mind to put such a low entry point? Just curious as we know you didn't buy the shares you sold at $7+ at that level.
Didn't I hear on the CC that they got 100 buses off lease this past year and have another 200-300 coming off lease this year? This will help out with interest expenses, although it will be partially offset by accelerating the lease payments on new buses. Which down the road means they will have a lot more newer buses that they own.
If the market thought the shares were actually valued at $3 then there must have been a lot of very stupid "suits" that bought 12m shares at $7.20, either that or they are comfortable with the companies current business model.