TravelCenters of America LLC
) is seeing improvement in the economy as more truckers stop at its
centers. This Zacks #1 Rank (Strong Buy), however, is dirt cheap.
It has a forward P/E of just 7.8.
TravelCenters of America operates (surprise, surprise) 235 travel
centers in 41 U.S. states and in Canada under the brands
TravelCenters of America, TA, and Petro.
The centers sell gasoline, operate restaurants, provide truck
repair facilities, operate stores and offer other services for
TravelCenters Beat in the Fourth Quarter By 76%
On Mar 15, TravelCenters reported its fourth quarter results and
blew by the Zacks Consensus by 29 cents. However, the company still
saw a loss of 9 cents compared to the consensus which was calling
for a larger loss of 38 cents. It was the fifth straight earnings
The company's net loss of $2.5 million was a big improvement from a
year ago, which showed a loss of $27.6 million due to increases in
fuel and nonfuel sales and a reduction in rent. Nonfuel sales rose
10% compared to the fourth quarter of 2010.
TravelCenters saw improving conditions in the trucking industry in
the fourth quarter, which is a reflection of the gradual
improvement in the overall economy.
However, TravelCenters was cautious on the sustainability of the
Zacks Consensus Estimates for 2012 Hold Firm
Since the report, there haven't been any changes in the 2012 Zacks
Consensus Estimate. It is calling for 83 cents per share, as it has
been the last 90 days.
This is actually an earnings decline of 15% from 2011 when it made
However, things are looking up in 2013. One estimate was revised
higher in the last week, pushing the Zacks Consensus up to $1.72
from $1.42. That is earnings growth of 107.2%.
Still a Cheap Stock
When I last looked at TravelCenters last November, it was a cheap
stock, with a forward P/E of 7.6. The story remains the same four
It is still trading with an extremely low P/E ratio of just 7.7.
Its other valuations, including price-to-book and price-to-sales
ratios, are low. Its price-to-book is 0.6. A P/B ratio under 3.0
usually means a company has value.
Its P/S ratio is a nonexistent 0.02. A P/S under 1.0 can mean a
company is undervalued.
Unlike many stocks in 2012, shares haven't done much in 2012.
Investors are showing caution.
TravelCenters is a play on an improving U.S. economy. It's also a
cheap value stock.
Tracey Ryniec is the Value Stock Strategist for
. She is also the Editor of the Turnaround Trader and Insider
Trader services. You can follow her on twitter at
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