I can’t get out of the oil patch today!
TransMontaigne rode out the hurricanes much better than expected but fears of disaster dropped this small ($300M) petroleum distribution company from $13 in August to the $7 we can get it for today.
Nobody tracks this poor little stock but their rates have gone way up but are less % per barrel than last year so no one is complaining. I’m complaining that I didn’t catch this in October when it was at $5 but wah, wah – so I’ll just buy it now.
First quarter profits, reflecting the new rates, were up 500% from last year on 45% more revenue. The trailing p/e is 5 and the forward p/e and PEG ratio are so low that Yahoo brings them up as an error.
The company is selling at .92 of book value with the whole market cap being $350M on sales of $8.5Bn. So if this company figures out how to make just one penny more per dollar of revenue, they will increase revenues by $85M – I like those kind of companies!
They are expanding so quickly that A/R is sucking up cash flow, not the worst problem in the world but it has skewed the books too make them look less attractive than they really are.
You can pick up the March $7.50 calls for .40 but for $7 you can also just buy the stock! First real resistance will be the 200 dma of $8.50 but that was pulled down for no good reason so it may be a long time before I want to let go of this one.
Good trading,
– Phil
