RE:RE:BlueCollarJmark1 wrote:
Keep on posting BlueCollar! I like to see your points of view articulated,.Just because you put out facts and may at times draw an inaccurate conclusion I find it valuable to followup on items you post. Keeps me thinking :)
Food For Thought
I have never said that Student Transportation is a bad company. The concept is great (Kids have to go to school regardless of the economy) and they do a very good job for their customers.
In my “opinion” there is a fundamental problem with the corporate structure. Student Transportation is for all intents and purposes’ an American company that listed on the TSX to take advantage of the “Income Trust” corporate tax advantages. They have since converted to a Corporation but have continued with the Income Trust model without the associated benefits.
Several former Income Trusts could not function as Corps and have disappeared. The vast majority that are left with very few exceptions have had to substantially reduce their distributions/dividends to survive.
Student Transportation has actually substantially reduced their dividend in USD terms.
They listed on the NYSE in 2011 and since then US investors have seen their STB dividend (declared in CAD) substantially reduced due to the weakness in the Loonie. STB has locked the USD dividend at very low historic rate.
When the Canadian Oil Industry recovers the Lonnie will recover and Canadian Investors will see their Dividend yield erode in exactly the same way that the US investors experienced.
Student Transportations POR has improved but a large part of the improvement is due to the weakness in the Loonie which has resulted in a reduced USD cash dividend cost.
In fiscal 2015 the USD cash dividends paid were actually less than in 2014 on 6.4% more “Weighted-average shares outstanding-basic” than in 2014. That wasn’t due to “Good Management” it was due to the exchange rate. (**Fiscal 2016 has started with 16% more shares than 2015 started with)
I don’t profess to be an expert on Corporate Accounting. It’s mostly “Smoke and Mirrors”.
It’s not too difficult to “follow the money”
- Cash in from all sources (Revenue , Equity Issues and/or Debt Issues)
- Where the cash goes.
- How much is left over at the end of the reporting period.
Student Transportation began fiscal 2015 with $10.858m Cash and $62.436m drawn on the Credit Facility. They ended 2015 with $5.333m Cash and $50.421m drawn on the Credit Facility. That looks like a $6.49m net improvement in the short term cash position for the year.
But when we remember that they raised $25.66m more with the Dilutive Equity Issue than they needed to redeem the Debentures the years Net Cash improvement doesn’t look quite so impressive.
As Always; Do Your Own Due Diligence; It’s Your Money !! PS; On the conference call I forget who said this (Denis or the other guy) about the NCIB. Whoever it was said that they had increased their allowable NCIB limit so that if the Share Price went below what they feel is the “Intrinsic Value” they could buy a bunch. There hasn’t been any NCIB purchases since Aug 05. It makes me wonder what they feel the “Intrinsic Value” is.