TravelCenters: Zacks’ Bull of the Day Play

TravelCenters of America (TASnapshot Report) has seen its estimates increase after their recent earnings beat due to record fuel margins. During the quarter, the company saw their fuel profits increase 65% year over year.  Further, same store sales improved 6.8% year over year.  Due to these factors, TravelCenters of America is our Zacks Bull of the Day.

This Zacks Rank #1 (Strong Buy) stock is a full-service national travel center chain in the U.S. with nationwide locations serving hundreds of thousands of professional drivers and other highway travelers each month – including virtually all major trucking fleets.  The travel centers operate under the TravelCenters of America, TA and Petro brand names and offer diesel and gasoline fueling services, restaurants, heavy truck repair facilities, stores and other services.

TravelCenters of America currently plans on building four new centers in 2015, and has been on an acquisition spree over the past year.  The company has purchased, or agreed to buy 48 sites with 45 convenient stores and three truck center locations for a cost around $76 million.

Estimates Increasing Due to Strong Fuel Margins

The table below shows the historic and future EPS estimates for TravelCenters of America.

Over the past 7 days estimates for Q1 15, and FY 15 have increased significantly; Q1 15 rose from -$0.06 to $0.17, and FY 15 increased from $0.83 to $1.08.   These numbers reflect the improving margins for the company which are expected to continue while oil prices are below $50 a barrel.

Positive Earnings Surprise

For Q4 14, TravelCenters crushed the Zacks Consensus Estimate of $0.12 by posting an EPS of $0.91, beating the Zacks Consensus Estimate by 658%. As you can see in the table below, the positive beat produced a strong uptick in price appreciation.

Bottom Line

With persistent low fuel prices in both gasoline and diesel, TravelCenters of America will be reaping large profit margins.  Further, the company has been able to increase same store sales while capitalizing on location expansion though out the U.S.  Finally, with low fuel costs more and more people are driving and taking vacations.  This will keep TravelCenters busy through the summer months.

Note: Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s