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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (13645)	12/29/2012 4:22:22 PM
From: bruwin	1 Recommendation Respond to of 34328

"I think you will find that their debt expense does increase after these acquisitions but these deals are accretive to EPS and the BV of the company increases too. BV has increased every year in the past 5 years." The thing is, one of the major "components" of Book Value is the valuation of Assets, and whether or not those values can be redeemed should the company sell them off or the company is liquidated, for whatever reason. What should also be considered is the following when one re-arranges the Balance Sheet to equate .... Share Capital + Retained Earnings = Total Assets - Total Liabilities If 'Share Capital' remains constant, which is often the case, and has been the case in recent times with TGH, then the only item that can vary on the left hand side of that equation is Retained Earnings. Needless to say, if the Left goes up, so must the Right. And that is why, for me, what one sees in the Income Statement is so important, because it's that Bottom Line which contributes to 'Retained Earnings'. I'd say that TGH has a good set of numbers, especially in terms of its EBITDA margin which is often in excess of 60%. However, whatever TGH's business is, the fact is that Interest Expense is currently eating away about 20% of its Quarterly EBITDA. Another thing favouring TGH's bottom line is the minimal amount of tax that the company is paying. Currently there's a tax credit or only about 4.5% to 8% on preceding Quarterlies. Below is TGH's chart (plus the company's last 5 Quarterlies) with the approximate positions of when TGH's Quarterlies hit the street. TGH's Bottom Line hasn't changed that much in the last 9 months. It's varied from $54.9mil. to its latest $50.7mil. However its Top Line Revenue has increased quite substantially (about 44%) from $84.7mil. to $122.3mil. Maybe 'the market' would like to see a somewhat equal rise in Bottom Line as we've seen in Revenue. From a 'market' perspective things were looking OK at Q1. But after Q2 its price took a dive of about 20%. And at Q3 the price has moved sideways, which often happens when there's uncertainty. Now maybe 'the market' has got it wrong and the company's future price may end up better than it currently looks.