Opinions
Teal Linde
Student Transport of America Ltd.
STB-T
WATCH
Feb 26, 2018
Stock price when the opinion was issued
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The last quarter was better than he expected. ROC improved, but that is just not enough. Dividend yield of about 7.5% is very tempting, but almost too good to be true. Expects they are paying out too much. He would like them to reduce the dividend and pay down some of their debt, which would make it more interesting.
A higher risk, more liquid name. He sees a 60% payout ratio, so the dividend is safe for now. Trading within its 5-year range, and that is usually pretty good. Debt levels are not low, but are not terrible. He expects some sales growth over the next couple of years. Q1 is usually a weak quarter, but this time it was a beat.
An extremely well-managed company. A tough industry with very low growth and a lot of competition. Management is using technology to their advantage to increase efficiencies. They are winning a lot of contracts and reinvesting a lot in the fleet. Doesn’t expect a lot of organic growth, or winning contracts from competition. Attractive dividend yield. He owns the convertible debentures.
They have a cozy little business. He sees 7% revenue growth from new contract wins. They had decent cost cuts and so be models 20% EPS growth. It is not cheap and it is a small cap so it is good until it is not good. It looks good now, but don’t make it a huge part of your portfolio. You have to keep an eye on it.
A cozy little company with a nice 8% dividend yield, which is covered pretty well with a 60% payout ratio. He is looking at 7% revenue growth on contract wins next year, combined with some cost cuts. The only problem is, it is trading a little above its 5-year average right now. He would wait for a bit of a pullback.
It has an attractive dividend. A high quality school bus operator. He does not own it because on a share basis the business has not grown due to share issuing. That could change as they get into a managed services business. He is waiting for per share growth to start to tick up.