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

Good place to hide, and fear vs. greed

[slimjim11]

I agree, STB is a good place to hide. The business is recession resistant, and the customers are diverse and stable. The asset-light business STB is building should contribute higher margins and significantly better Return on Assets than the existing bussing business, which contribution will improve the overall corporate cash flow and assuage the naysayers' Payout Ratio fears. When we see STB move up significantly on low volume on down market days, we have to assume it's fear-driven buying by short sellers losing money, rather than greed-driven buyers by long investors anxious to get in. Fear is a more powerful motivator than greed. Losing money hurts more than making it. On a down market day, investors aren't usually anxious to buy. I read yesterday's market action for STB as fear-driven, itchy-trigger buying by shorts. If that's what's going on, and if the short ratio is still at 11 days where it was 12/31/15, that would suggest there are more up days to come as anxious short sellers exit. Not all buying is short covering, and being short a rising stock knowing it would take 11+ days of pain to get out of a short position, would be a fearful place to be. As the shorts exit in fear-driven bursts, expect the long buyers driven by more patient greed to take over. And the high, cash flow sustainable, US$ yield in a recession resistant business with a diverse portfolio of stable customers, here at STB will be attractive for many investors.