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

Dennis on BNN

[Al42]

Well I listened to Dennis this morning on BNN and everything he said sounds good and seems to be trending in the right direction. Really doesn't make sense why the share price has been beaten down so much. I got the sense that Dennis is perplexed as well.
Oh well, I guess people are tired of the 10 plus % dividend or are scared with the interest rate call coming up.

[Al42]

For those that missed it here it is. https://www.bnn.ca/Video/player.aspx?vid=704358

[talladega10]

Even at the current stock price STB trades at 2.6 times book value and an astronomical 350 P/E, so that may be a clue as why the stock is down. I suspect the only thing holding the price up is the dividend yield.

[Riskfetish]

Works for me. 

[talladega10]

My mistake the P/E ratio is now 263 not 350 but still very high considering the normal market average is less than 20 times.

[Jmark1]

Wrong measure for what is essesntial a trust! Have a look at P/E for companies that use a dividend paying model, they are all very high. FFO/PPS would provide a better metric. It's difficult if not impossible to figure out what moves stocks these days! There are so many instruments used to PLAY the markets and all those suits are at it daily, its there job! This isn't the same market

[goldsternp]

I have owned a large number of STB shares for 5 years including margin. This is the only stock I hold where it feels like a "family" business, albeit managed properly. Denis Gallagher really likes what he is doing and appears to have infected  his employees with his enthusiasm. To me, the recession proof nature of the business and the absence of cut throat or foreign competition

[ffhwatcher3]

They have loan covenents on their existing debt that (probably) won't let them do that.  They do have a large capacity to borrow but that is to buy existing businesses or buses.  Again the terms of the loans dictate what they can do with the proceeds.  The math you are suggesting makes sense but it should be pointed out that in times of distress and negative cash flow, dividends

[b4545]

hey watcher, did we listen to the same cc? . You  posted "They spend the entire 94% that is leftover to run the existing business.  To grow the business, they must borrow and then eventually do a share issuance to repay the long term debt, if all goes well." . Did you not hear Dennis talk about the debt repayment, and the shares they bought back earlier this yr? And they

[ffhwatcher3]

They issued equity and raised $69.1M and paid down $70M in debt. @ They hardly, if any, used any cash from operations. Denis said they paid down debt but he didn@t say they did it with free cash flow. They bought back about $900,000 worth of shares. @Not very significant but it is something. What was interesting and what helped me understand the company even more, is understanding that the

[goldsternp]

Many thanks. I can see that the debt could be awkward if they run short of cash to pay the interest. However, with the big difference between current dividend rate and 5 year interest rate it would seem a risk worth taking. If the banks won't let them use debt for share retirement then there is no option. I am embarrased to second guess the company as they have been good at making the right

[PowerPlay47]

Poor Denis, he even said he would like to increase the dividend but it is already at 11%. Hey, cut the dividend to zero, then what do you have? A company worth 2.6 times book with a 9 P/E and growing at more than 10% per year.  Comany is growing at 13% and giving me a dividend of 11%.  Sounds great.  I don't care that Mr. market does not get it while I accumulate.  Maybe

[BlueCollar51]

Student Transportation is a Good Company that does a Good Job for their customers.   Good Companies aren’t always Good Investments!   STB has just paid its 128th consecutive UNEARNED distribution/dividend.   Denis Gallagher has done a very good job growing the company and is a good promoter.   I would suggest paying a lot more attention to the Financial Reports and a bit less

[goldsternp]

Congratulations on your good timing. I believe the CD redemption was done well: 1. Originally the company received US$48 million for those debentures and redeemed them  at US$40 million. The gain was US$8 million. 2. Company timing on the secondary was  good; just like your sale.  You claim that company is diluting shareholders equity even though shareholders equity increased by

[scotyfilms]

Hmmm I didn;t realize this part of it. Damm I bought at $7+. Stuck underwater.