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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (50196)	11/30/2012 11:25:02 AM
From: E_K_S	Read Replies (2) of 78530

CAI International Inc. (NYSE: CAP) SeaCube Container Leasing Ltd. (NYSE: BOX) goo.gl CAP looks like a good value play except for me there were two items that were not so attractive: (1) No dividend and (2) their level of debt to annual net income is quite high. These companies will typically have a high amount of debt (and leverage) so it's just the nature of their leasing business. I have built a nice position in BOX which provides similar services but also pays a good dividend. This is in the IRA so that dividend stream is important to me. From a basic value approach, CAP looks to be undervalued by at least 50%. Analysts EPS estimates: 2012 = $3.22/share 2013 = $3.84/share Positive EPS for the last five years EXCEPT 2009. Book Value continues to grow each year for the past several years. BV=$14.37/share; TBV=$14.28/share PE<= 15; Forward PE =5 and Trailing PE= 6.62 Total debt= $873.8M vs Net Income $59M 14.81 x Net Income to cover lt debt. ( I like 4x or less) BOX is lower at 11.58x and is still quite high. The Graham No for CAP comes in at around $32.00/share or about 61% undervalued from it's current price of $19.81/share. Maybe this is more of an EK$ value as CAP does not show 10 years of positive EPS but even at $19.81/share, this one does present a compelling value. Therefore, I may sell some of my BOX and move the proceeds into CAP giving up my dividend for a very nice potential capital gain. EKS

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