STUDENT TRANSPORTATION INC 5.25 PCT DEBS T.STB.DB.A

RE: Divi is sustainable

[poulton50]

I agree. The Earnings (from the accounting point of you) are the last thing to look at before you make a investment decision to buy/sell or short the company shares. The Earnings include too many of NON CASH items like depreciation/amortization or unrealized gain or loses.

The depreciation charges that make STB reported earnings smaller  are actually good thing as they shelter the earnings  from the tax.

STB dividends are paid from the Distributable Cash Flow ( EBITDA – cash Interest (net of non-cash items) – Cash Taxes – Maintenance Capex) not the earnings as suggested . Anticipating payout ratios is in the 80-85% range.
 

Eiad Asbahi , hedge fund manager who short the STB shares and publish  the report does not care about objectivity or accuracy. He did not wrote the report to warn present or future shareholders. Boosting the performance of his Fund is the only thing he cares.