keerthiprasad Posted December 18, 2009 Share Posted December 18, 2009 I know the economy is still looking pretty tough to much of the board, but I was wondering if anyone has been following TravelCenters of America? I was recently traveling through the Midwest for job interviews and stopped a bunch of their locations. Incidentally, one my interviewers actually told me to check out TA. I really haven't paid much attention to them in a couple years and am just starting to get caught up now. I was just wondering what everyone's opinion is. thanks guys Link to comment Share on other sites More sharing options...
bonechip1 Posted December 18, 2009 Share Posted December 18, 2009 You may find this recent fool.com thread on the Falling Knives board interesting: http://boards.fool.com/Messages.asp?mid=28110885&bid=117341 Link to comment Share on other sites More sharing options...
Packer16 Posted December 18, 2009 Share Posted December 18, 2009 Although this may appear cheap there are some inter-company loans and agreements from HRP Properties which change some of the economics from an equity holders perspective. The description is in the footnotes. Packer Link to comment Share on other sites More sharing options...
keerthiprasad Posted December 18, 2009 Author Share Posted December 18, 2009 yeah actually the more i read into this, the more difficult it seems. I appreciate it guys. Link to comment Share on other sites More sharing options...
scorpioncapital Posted December 18, 2009 Share Posted December 18, 2009 well you buy at 1/10th book and sell at 1/5 of book and you've doubled your money. That's pretty much what happened in TA from about 2 1/2 to 5+, now back down to about 4. Link to comment Share on other sites More sharing options...
Eric50 Posted December 18, 2009 Share Posted December 18, 2009 yes but there is a catch. It's a spin-off out of an REIT and that REIT owns the real estate where the truck stops are located on. The parent company charges TA a lot for the leases.... Also, the margins of the business are dependent on the price of oil. When oil was at $150 last year, they were losing money because they still had to pay their rent. When oil was at $40 early this year, it was a huge cash cow... Super low valuation but risky long term if you see much higher oil prices in the future. Link to comment Share on other sites More sharing options...
arbitragr Posted December 18, 2009 Share Posted December 18, 2009 Alot will depend on trucking traffic volumes. I see TA similar to Buffett's railroad play, except this is on the road. Link to comment Share on other sites More sharing options...
scorpioncapital Posted December 18, 2009 Share Posted December 18, 2009 "When oil was at $150 last year, they were losing money because they still had to pay their rent. When oil was at $40 early this year, it was a huge cash cow..." They didn't make any money when oil was $150 or when it was at $40, they went from a loss due to high prices to a loss due to the recession. Hopefully steady oil prices and coming out of a recession will help. Link to comment Share on other sites More sharing options...
CONeal Posted December 19, 2009 Share Posted December 19, 2009 Alot will depend on trucking traffic volumes. I see TA similar to Buffett's railroad play, except this is on the road. You took the words right out of my mouth. ;D In addition: After they pay off the deferred rent the cash on hand is approx $7.14 per share. They should have enough cash to last till volume picks back up. I really don't pay attention to the other assets on the balance sheet such as the properties they own and are undeveloped. Because of the position TA is in, they are able to weather this downturn while competitors are shutting down. Once the economy is up and going this should help TA pick up more market share and also increase fuel volume. It is in the best interest of HPT to work with TA and lower the rent if needed for this company to be profitable. Since most of these locations are in the middle of nowhere, it would be very difficult if not impossible for them to rent out these locations to another company. I think HPT would rather take a little less in rent than no rent if TA asked for it. The relationship between the two is a two way street b/c they both depend on each other through their agreement. Sure they could take TA back over, my understanding is HPT would lose their REIT status if they did. I'm not sure where oil will be 1 year from now, if its back up to $150 anytime soon there will probably be a revolt. When oil is that high it hurts the economy, with everything that happened the last go around goverment officals will try to take the steps necessary to avoid this again. Please feel free to pick apart my logic. Link to comment Share on other sites More sharing options...
Guest kawikaho Posted December 19, 2009 Share Posted December 19, 2009 Hahahahahaha! HAHAHA! with everything that happened the last go around goverment officals will try to take the steps necessary to avoid this again. Link to comment Share on other sites More sharing options...
twacowfca Posted December 19, 2009 Share Posted December 19, 2009 Alot will depend on trucking traffic volumes. I see TA similar to Buffett's railroad play, except this is on the road. You took the words right out of my mouth. ;D In addition: After they pay off the deferred rent the cash on hand is approx $7.14 per share. They should have enough cash to last till volume picks back up. I really don't pay attention to the other assets on the balance sheet such as the properties they own and are undeveloped. Because of the position TA is in, they are able to weather this downturn while competitors are shutting down. Once the economy is up and going this should help TA pick up more market share and also increase fuel volume. It is in the best interest of HPT to work with TA and lower the rent if needed for this company to be profitable. Since most of these locations are in the middle of nowhere, it would be very difficult if not impossible for them to rent out these locations to another company. I think HPT would rather take a little less in rent than no rent if TA asked for it. The relationship between the two is a two way street b/c they both depend on each other through their agreement. Sure they could take TA back over, my understanding is HPT would lose their REIT status if they did. I'm not sure where oil will be 1 year from now, if its back up to $150 anytime soon there will probably be a revolt. When oil is that high it hurts the economy, with everything that happened the last go around goverment officals will try to take the steps necessary to avoid this again. Please feel free to pick apart my logic. CONeal, I can be real picky,but you know a lot more about this situation than I do. The relationship between HTP and TA that you describe sounds like it could be similar to the relationship between Coke and its bottlers where it's in Coke's interest to allow its bottlers to earn a small profit, but not too much profit. However, Coke is well financed, but if they were leveraged to the hilt like private equity cos often are, they might go bankrupt if they didn't receive enough revenue from their captive to pay the obligations of the parent co. Also, PE cos are often greedy and may be unwilling to let a captive "earn" more than enough to barely fund their capex -- making the captive co a cash cow for the PE co through rents or royalties with no milk left over for the "owners". This doesn't sound like a retail store where an owner can box up his goods and move to another location if he doesn't like the landlord's raising the rent. Link to comment Share on other sites More sharing options...
CONeal Posted February 6, 2011 Share Posted February 6, 2011 Company announced that rent has been reduced and all the deferred rent is not due till 2022 interest free. Nice pop to the stock pver the last week. http://investor.shareholder.com/ta/releasedetail.cfm?ReleaseID=546647 Link to comment Share on other sites More sharing options...
scorpioncapital Posted February 7, 2011 Share Posted February 7, 2011 As far as the latest published 10-q, their involvement is insignifcant. Personal accounts? That would be highly unethical when LUK could have negotiated for the entire company over the last year or two so I would speculate no on that front too. Link to comment Share on other sites More sharing options...
scorpioncapital Posted February 7, 2011 Share Posted February 7, 2011 LUK's stake in Keen Energy is $231 million as of 12/31/09 (latest 10-k available) LUK's investigation of other energy projects has been about $70 million over the last 3 years. So total investment in this field is about $300 million so far. Link to comment Share on other sites More sharing options...
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