# Trimac Transportation



## nakedput (Jan 2, 2013)

Anyone have any thoughts on this company (Ticker TMA)? They are involved in the bulk freight business - oil&gas, chemicals, cement, woodchips, etc in bulk form (eg, no packaging)

At current share prices, the yield on the dividend is roughly 4.7%, which was the first thing that piqued my interest in this company. They became a corporation in 2010 (income trust before), so the dividend used to be a lot higher for obvious reasons, but the divvy has increased on a yoy basis since corporation inception. 

In terms of financials, please see below for a few highlights:
-revenue increased 18% yoy from '11 to '12
-EPS increased 24% yoy from '11 to '12 (58% from '10 to '12)
-Total Assets have increased roughly 40% from '08 to present

In terms of trends, every metric investors look for has been increasing for the past 4 years (revenues, ebitda, dividends, assets, etc). I like this company but the stock is up roughly 33% from May 11/13 of last year and is currently trading near its 52 week highs. The P/E is also at only 10x earnings (transforce around 13 for comparison) I think if you believe that Canada will continue to grow its resource based economy than this may be a worthwhile investment to you with the companies' dividend high growth model. The capital costs are quite high for companies in this space so the barriers to entry are quite large. I also like that management is moving out of the downtown core (Calgary) and into much cheaper real estate in NE Calgary. This shows Mgmt is committed to controlling operating costs.

Does anybody here follow this company? Any comments/discussion?


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## doctrine (Sep 30, 2011)

I have a position in TMA. I bought about half my position at $4.97, then 25% at $5.39 and another 25% at $5.74. They have a good yield at 4.7% with a payout ratio around 55% and as you said a P/E around 11.5 based on my numbers. Given that they historically paid much higher dividends before converting to a corporation, there will likely be more dividend hikes in the future.


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## AltaRed (Jun 8, 2009)

doctrine said:


> Given that they historically paid much higher dividends before converting to a corporation, there will likely be more dividend hikes in the future.


They paid BT distributions before conversion to a corporation, while paying AT dividends after conversion. The 2 numbers are not directly comparable (especially if they are in a tax paying position).


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## londoncalling (Sep 17, 2011)

I considered buying this one a few months ago and still am considering. I had know reason not to buy (no red flags except the nearing 52 week high issue) at the time. Not sure if we will get a market pullback this summer(so far it appears not) but I am waiting for one. I like the business model and metrics. I also like that in a time of commodity weakness it is still rising.


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## doctrine (Sep 30, 2011)

I really liked it at $5 when I got into this and when it had a 5.5% yield, it's at $6 now and I think still good value, although no "pressing" emergency to buy. It hasn't dropped back below $5.5 this year.


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## Eder (Feb 16, 2011)

I bought in a few months ago because they haul oil and they are thinly traded.


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## riseofamillionaire (Feb 23, 2012)

Great little company. Simple, easy to understand business. Nice growth metric, divy... Wondering why I never bought this xD


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## Eder (Feb 16, 2011)

A added a bunch more today on weaker earnings report. 5.5% yield PE under 10.


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## liquidfinance (Jan 28, 2011)

Eder said:


> A added a bunch more today on weaker earnings report. 5.5% yield PE under 10.


Been looking at this one for a while. Still not pulled the trigger on it just yet. Doesn't seem like there is too much chance of amazing earnings and divi growth but should plod along quite nicely. Still thinking.....


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## Eder (Feb 16, 2011)

They raised their dividend over 10% last Sept and with a low payout ratio under 20% there's lots of room to bump it up I think. Poor liquidity may be undesirable to many investors though.


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## liquidfinance (Jan 28, 2011)

I was looking at it from an earnings perspective. In which case it is 100% Earning of 7 cents against a payout of 7 cents

I agree it is only 20% of cash generated but I need to look into it a lot more such as what vehicles they own, how they are financed and when the average age is. I don't want them to be issuing new equity to fund vehicle purchases.


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## doctrine (Sep 30, 2011)

I did review the quarterly report quite closely.. there are a number of one time hits that have driven numbers down and account for most of the lower income, including costs of acquisitions and moving expenses as they relocate headquarters out of Calgary. A number of these will result in lower costs in the future. So, I'll hold my position. The drop was pretty much what I expected; if it drops below $5 then I may be a buyer of up to 500 shares.


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## liquidfinance (Jan 28, 2011)

Doctrine, I had a read through your review and have been watching this for some time. I have also been watching Contrans. How do you feel this compares to Trimac?


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## doctrine (Sep 30, 2011)

They're pretty close; Contrans is priced a little higher but had a better previous quarter. Both are down about 15% from their 52 week high. Contrans is a little more volatile than Trimac. I'm sure you'd be okay with either, although I don't see anything compelling enough to switch my holdings. Trimac seems to have been stabilized so I haven't added to it either.


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## liquidfinance (Jan 28, 2011)

Taken me a while but decided to take a small position in this one.


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## londoncalling (Sep 17, 2011)

I totally forgot about this stock. Perhaps it's time to revisit. Why did you decide to pull the trigger now?

Cheers


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## doctrine (Sep 30, 2011)

I still hold my shares. They're still quite fairly valued, good 5.3% dividend which is well covered. I think they're a definite buy at the $5 level.


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## liquidfinance (Jan 28, 2011)

londoncalling said:


> I totally forgot about this stock. Perhaps it's time to revisit. Why did you decide to pull the trigger now?
> 
> Cheers


There was no real compelling reason. It has a low valuation. I think earnings will hold up and it has an attractive payout.

Though if i'm honest i'm just a big kid that likes trucks. As a kid I dreampt of owning my an fleet. Now I guess this is just a little piece of that dream. Sometimes you just have to do what makes you happy. :redface: 

Hardly a sound basis but hey its a small position so what the hell. :encouragement:


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## londoncalling (Sep 17, 2011)

Thanks to both for the update. I got a stink bid in on this one again. Unless I come across some tax loss harvesting opportunities before month end I probably won't allocate any capital till taper talk rears it's lovely/ugly head

cheers


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## canadian_investor (Jul 4, 2011)

i looked into this sector recently. I found three main companies - Trimac, Contrans and Trans Force.
Transforce (TFI) seems to be the biggets player in this sector. markt cap of over 2.5B$
how would you all rate trans force vs. trimac vs. contrans.
for someone looking to enter this sector will it be better to buy just the larger player Trans force?
i don't want to hold more than 1 stock in a 3 company sector


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## liquidfinance (Jan 28, 2011)

Nice little pop today and an upgrade by TD

http://www.wkrb13.com/markets/277275/td-securities-upgrades-trimac-transportation-to-buy-tma/


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## doctrine (Sep 30, 2011)

I saw the pop. 2013 results were soso. Still solid earnings, but no increase in EPS. Still holding.


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## martinv (Apr 30, 2009)

*Finally bought TMA today*

I have been watching TMA for quite a while and looked at it more seriously after my other transportation stock Contrans ( CSS ) was taken over by TransForce (TFI ).
The share price just didn't seem to want to go down with the rest of the market recently.
It finally came down from 7.00 to my bid of 6.32 but only for a partial fill. Will keep trying.
The dividend is currently 4.43%.
With fuel prices coming down, earnings may start to increase.
In a few years, we will all be able to see how it went with our rear view mirrors.


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## Eder (Feb 16, 2011)

I think that there is consolidation in the air for this sector lending some strength to Trimac share values. I hold it for the dividend but cheaper fuel prices should help this business alot as well. I'd like to buy more at $5 again.


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## martinv (Apr 30, 2009)

Earnings out later today. Still trying to buy. Bought some at 6.32 but then someone on BNN made it his top pick.
Now over 7.00 again.


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## londoncalling (Sep 17, 2011)

Lower gas prices may be boosting the share price as well. Hoping to get in somewhere around 6.00 . The October correction came at a bad time for me. Super busy at work and not much cash in the equity account for the opportunity. Made a few purchases but wanted to get more done.


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## doctrine (Sep 30, 2011)

They do have fuel surcharges built into their prices which will go down when gas goes down, so I don't think they'll have as big of a boost to low gas prices as you might think (other than perhaps more orders due to customers paying less for their own fuel costs). Q3 results were down a little but overall okay. I don't see this stock at a higher P/E than 15, so it is, in my opinion, on the expensive side above $7. Good buy at $5-6 though for sure - very solid dividend especially if you can get > 5% yield.


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## londoncalling (Sep 17, 2011)

I meant more companies using trucks for transport because of lower gases prices but thanks for sharing the info on fuel surcharges


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## HaroldCrump (Jun 10, 2009)

Regarding transportation, falling oil prices is a double-edged sword.
If oil is falling because of over-supply only, that's great.
But if it's falling because demand is falling (i.e. economic activity is reducing), then it is a bad sign for transportation.
Most transport companies will prefer increasing economic activity & trade, even if oil prices are rising, rather than the other way around.


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## Fraser19 (Aug 23, 2013)

Drop today, Thinking about putting in for 250 shares on Monday.


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