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

it's simple, they have to start making money

[d_trump]

In five years they have doubled their sales but net profit has gone no where.    It's fine to look at cash flow and the cash payout ratio, but at some point you have start turning a profit.   IMHO they should be taking a break from seeking further growth and focus on improving profitability.  Oil prices and the weak CAD gives them a nice tailwind.

[borne2run]

1.  Oil prices may not be that important as some customers pay fuel costs and others have cost sharing arrangements.  2.  Think I once read that vehicles are depreciated over six years but have a life of about twelve. STB has a relatively new fleet.  If growth moderates, depreciation costs may start to decline in a few years. 3.  Another significant non-cash expense is

[d_trump]

Good post Borne - I agree with you more or less. I agree that the fuel savings will not be what it may seem due to offsets in contracts, however it should still be a positive. Cash flow has grown however not so much on a per share basis. And amortization of intangibles is quite small. But regardless these are all valid points - that said I believe that the market penalizes STB for lack of

[borne2run]

yes, trump, you are correct, amortization of goodwill is quite low. However, depreciation + amortization will total about $50 million for 2015 - that's over 50 cents per share. 2014 Year End Property & Equipment:  $231 million Net debt:  ~ $250 million 2015 Year End (Estimate) Property & Equipment:  $207 million Net debt:  ~ $180 million Punished for no earnings,

[d_trump]

Haha, Tesla and Amazon.....cult following I suppose.  Tesla is likely bankrupt in 3 years yet it trades at 1 million times earning.  I don't generally short stocks but if you forced me to, Tesla would be my top pick......