A Seaonal Travel Play

Written by GSCR Staff   
Thursday, 21 March 2013 09:31

Good morning!  Although this may be hard to believe as we endure a true March lion, Spring and Summer are coming soon.  This means travel.  If the recent trends continue, more Americans will take to the highways than take to the skies again this travel season.

 

TravelCenters of America, LLC (NYSE – TA - $9.65) is not only a great short term play but a true value.  The stock is up from $4.81 since the start of the year and took a huge jump from $7.67 on March 18 when financials were released came out.  The charts look great as and the stock is poised to run over $10.00.

 

TravelCenters of America LLC operates and franchises 244 travel centers primarily in the United States offering diesel and gasoline.  The company partners with well known restaurant chains to offer full service at all stations.  These include Iron Skillet and Country Pride brand names, and quick serve restaurants primarily under the brand names of Arby's, Burger King, Dunkin' Donuts, Pizza Hut, Popeye's Chicken & Biscuits, Starbuck's Coffee, Subway, and Taco Bell.  Additionally, TA caters to trucking clients offering repair and maintenance services, as well as modern conveniences like Wi-Fi, laundry, ATM, fax, overnight mail, and private shower and locker facilities.

 

The stock is also a great value based on projected EPS and revenue (8x FY13 EPS and a fraction of $8.4BE in revenue vs. its sub-$300M market cap.).  This could be a great play ahead of travel season and a general rebound in the trucking industry.  We think the $12.00 price target is achievable in 2Q13.

 

Have a great day!

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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