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Glenn Rogers is a longtime contributor for BuildingWealth.ca (http://www.buildingwealth.ca). His background is in Media and Publishing and has held a number of senior positions in major magazine and newspaper organizations. He has also successfully partnered with private equity firms to... More
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  • Textanier Group Update 0 comments
    Feb 25, 2011 8:49 PM | about stocks: TGH
     Textainer Group Holdings (NYSE: TGH)

     

    Originally recommended on Nov. 23/09 (IWB #2942) at $15.68. Closed Friday at $35.54 (all figures in U.S. currency).

     

    Textainer, which is based in Bermuda, is the largest shipping container leasing company in the world. It operates globally offices in South America, Europe, the Mediterranean region, the Middle East, Asia, and Africa. The big Singapore office handles Southeast Asia, China, and Australia.

     

    This stock has been a huge winner for us since I recommended it in November 2009 when it was trading at $15.68. I suggested taking half profits last August when it already risen 75% and was trading at the time at $27.52. The company has continued to perform well, closing Friday at $35.54 for a gain of 126.7% since the original recommendation.

     

    On Feb. 10, Textainer released fourth-quarter and year-end results (to Dec. 31) and they were impressive. Net income attributable to common shareholders for the quarter was $40 million ($0.81 a share), which was an increase of $14.7 million, or 58%, compared to $25.3 million for the same period in 2009. For fiscal 2010, the company earned $120 million ($2.43 per share), up 32% from 2009.

     

    The company announced it is passing on some of the profits to shareholders with a dividend increase of 7.4% to $0.29 per quarter ($1.16 a year). The yield going forward based on the current price is 3.3% but readers who bought shares at the time of my original recommendation will enjoy a 7.4% dividend return this year.

     

    Even at current valuations the stock doesn't look too expensive with a trailing p/e ratio of 14.4. As the global economy continues to improve, demand for this company's services should rise along with it so I continue to hold it in my portfolio.

     

    Action now: Hold.

    Themes: Transportation, Shippers Stocks: TGH
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