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TravelCenters of America | #05
This Week's Most Undervalued Stock is TravelCenters of America, Inc.
Welcome back to Closingbell Gems #05.
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👀 How did we find this week’s stock
Here is the exact search we ran across 6500+ US companies in Closingbell Pro. It produced ~350 results.
Now onto TravelCenters👇
TravelCenters of America, Inc.
TravelCenters of America has a Closingbell Valuation Index of 6% making it relatively undervalued against its peers.
TravelCenters’ peers are considered the constituents of the Retail GICS group.
📈 Price Forecast by Analysts
On the Closingbell App, the 2 analysts offering price forecasts for TA have a median target of $56.85.
The median estimate represents a +44.85% upside from the current price.
📰 Recent Headlines
TravelCenters Of America Inc is a US-based company which operates travel centers and standalone restaurants. It operated or franchised several travel centers, few standalone truck service facilities, and some standalone restaurants.
The company's customers include trucking fleets and their drivers, independent truck drivers, highway and local motorists, and casual diners. It generates revenue from fuel operations, non-fuel operations, rents, royalties and other fees from tenants and franchisees.
TravelCenters of America's nationwide business includes travel centers located in 44 U.S. states and in Canada, standalone truck service facilities located in three states, and standalone restaurants located in 12 states. TA's travel centers operate under the 'TravelCenters of America,' 'TA,' 'TA Express,' 'Petro Stopping Centers' and 'Petro' brand names and offer diesel fuel and gasoline, restaurants, truck repair services, travel/convenience stores and other services designed to provide attractive and efficient travel experiences to professional drivers and other motorists.
TA's standalone truck service facilities operate under the 'TA Truck Service' brand name. TA's standalone restaurants operate principally under the 'Quaker Steak & Lube,' or QSL, brand name.
About The CEO
Mr. Pertchik has been an executive vice president of RMR since 2019. Prior to joining RMR, Mr. Pertchik served as the chief executive officer of InTown Suites, Inc., a leading provider of economy, extended stay living, from July 2014 to April 2019.
From February 2013 to June 2014, Mr. Pertchik served as the chief executive officer of ST Residential, LLC, an owner and manager of luxury condominiums, apartment projects, hotels, and office and retail spaces, where he had previously served as chief operating officer from March 2010 to February 2013.
Prior to joining ST Residential, Mr. Pertchik held various executive management positions at WCI Communities, a luxury homebuilder and developer from 2007 to January 2010, and had been a senior vice president and managing principal at The Staubach Company, a leading national real estate tenant representative, from 1999 to 2006.
Additionally, Mr. Pertchik served as a member of the board of directors of AV Homes, Inc., a publicly-traded homebuilder, from July 2014 until its sale in October 2018, and has served as a member of the board of directors of Lenkbar, Inc., a private inventor, designer, engineer and manufacturer of medical device products since December 2014.
Mario Gabelli is just one insider who is purchasing TravelCenters of Amera. While he only holds a small portion of his portfolio (0.01%) in TA, he has recently bought 35k shares in the backend of 2021 at an average closing price of $37.46.
TA saw Year-over-Year improvements across:
✅ Net Income
✅ Diluted EPS
✅ Net Profit Margin
✅ TA beat both: (a) the Retailing Industry and (b) NSDQ Co’s across 6 key fundamental metrics
❌ TA had no Trailing Dividend Yield
❌ TA has a worse Return on Equity than the Market.
✅ TA beat both: (a) the RetaIL Industry and (b) NSDQ Co’s across PE ratio by a wide margin.
❌ TA is more volatile than the Market
❌ TA has a higher leverage ratio than the industry and Market
❌ TA has a lower interest cover ratio than the industry and the Market
If you’d like to learn more, we’ve included an Appendix with definitions of each of these metrics.
You should weigh in 🥊
Head over to Closingbell to Discuss TA:
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Appendix: Metric Definitions
👉 Earnings Yield: A percentage measure of the return the company is making, based on its after-tax earnings and the current share price. Calculated as earnings per share divided by the price per share. Higher earnings yields can be interpreted as representing higher returns for an investment at the current share price.
👉 Trailing Dividend Yield: Your annual income from your investment in the company. Indicated yield represents trailing total annual dividends divided by current stock price.
👉 Price to Book Ratio: This ratio describes the relationship between the share price and the company's contributed accounting equity (plus retained earnings). Calculated as the price per share divided by the book value of equity per share. Other factors being equal, a lower price to book ratio can indicate a more attractive investment, according to some investors.
👉 Price to EBITDA Ratio: This ratio describes the relationship between the share price and the company's contributed accounting equity (plus retained earnings). Calculated as the price per share divided by the book value of equity per share. Other factors being equal, a lower price to book ratio can indicate a more attractive investment, according to some investors.
👉 Return on Assets: A measure of how productive the company's assets are in producing its earnings. Calculated as the earnings divided by the book value of assets of the company. A higher return on assets is often thought by investors to indicate a more efficient and profitable company.
👉 Price to Cashflow: A measure of the current share price as a percentage of the cash flow per share generated by the company. Calculated as cash flow per share divided by the current market price per share. A lower ratio is often thought to represent a more attractive investment by some investors.
👉 Return on Equity: A measure of how productive the company's contributed equity is in producing its profit. Calculated as earnings divided by the book value of equity of the company. A higher return on equity is often thought by investors to indicate a more profitable company.
👉 Price to Revenue: A measure of the price per share of the company as a percentage of its revenue per share. Calculated as share price divided by revenue. A lower ratio is often thought to represent a more attractive investment by some investors.
👉 Enterprise Value to EBIDTA: This ratio expresses the Enterprise Value of a company, which is the market value of equity plus total debt minus cash, divided by the pre-tax earnings before adjustments for interest, depreciation, and amortization. It represents the total value if the business as a multiple of its EBITDA, and a higher ratio is often thought to offer a relatively more attractive investment by some investors.
👉 P/E Ratio: Current stock price divided by trailing annual earnings per share. If a stock sells for $25.50 per share and has earned $2.55 per share this year, then it has a trailing P/E ratio of 10 ($25.50 / $2.55 = 10). This means the stock is currently selling for ten times its earnings. Other factors being equal, investors may regard companies with lower P/Es to be relatively less expensive.
👉 Leverage Ratio: A measure of the amount of debt the company has divided by the market value of its equity plus its debt (less cash), or enterprise value. Other factors being equal, lower leverage in a company's capital structure can mean lower financial risk for investors.
👉 Volatility: Investors may often use this as a measure of an asset's absolute investment risk. Calculated as the annual standard deviation of the percentage daily price changes. The higher the volatility, the more the share price moves up and down, and the more uncertain (riskier) returns may be.
👉 Interest Cover Ratio: A measure of the company's earnings relative to the cost of its debt. Calculated as the cash operating earnings before interest and tax divided by the annual interest expense. A higher number can indicate the company is in a better position to service its debt under different scenarios.
Disclaimer: The information that Closingbell provides is general in nature as it has been prepared without taking account of your objectives, financial situation or needs. It does not constitute a recommendation to buy or sell any stock. This email is not intended as legal, financial or investment advice and should not be construed or relied on as such. Closingbell is not responsible for any damages. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered legal practitioner or financial or investment adviser. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Closingbell has no position in any stocks mentioned.