Monday, November 21, 2011

RSY: Tall TAL

Sabrient rates TAL a Strong Buy for its superior value and growth profiles, which indicates a stock that should outperform the market. TAL International Group, Inc. boasts an outstanding value growth of 80.4 (out of 100) and more outstanding is its 100 score on growth. Rigorous backtesting reveals that stocks with similar growth profiles outperform the market in the long term especially if they continue to exceed expectations. Just last month it beat consensus estimates for the 3rd quarter by 10 cents to $1.01 per share. Even though the pay out ratio is above 50%, with strong performances like last quarter, that should be a minor concern.

Underlying TAL's excellent value scores is its earnings score of 70.1 and outstanding fundamental score of 86.9. TAL's forensic accounting score is average, which indicates its level of risk going forward. With these strong fundamental scores TAL is expected to significantly outperform the market over the near term.

TAL's next ex-dividend date is coming up on November 29 with a dividend of $0.52/share. The dividend yield is a very decent 7 1/2% and each quarter the ratio is 1.85%. Adding this position will increase exposure in the services sector but unique in the rental and leasing of transporters. RSY recommends a buy limit order of TAL 400 shares at a limit price of $26.99 for tomorrow's opening (GTC). Today's market weakness will probably reverse some at the opening, but still down over a dollar from Friday's close.

Update
Since the last update, dividends provided almost $650 of gains in the model portfolio. RSY also closed out the call option on ARLP for a gain of $267 and the put option on DLX expired with a gain of $239. Below is all the transactions in the model portfolio since inception. (Click to enlarge.)



Optional Options
ALLIANCE RES PARTNER L P UT LTD PART JUN-12 $75.00 CALL @ $6.05
COMPASS DIVERSIFIED HOLDINGS SH BEN INT MAY-12 $15.00 CALL @ .75 Loss
DELUXE CORP COM APR-12 $22.50 CALL @ $3.40 <>
KRONOS WORLDWIDE INC COM MAY-12 $20.00 CALL @ $5.00
STMICROELECTRONICS N V NY REGISTRY APR-12 $7.50 CALL @ .95 -----


WSTG 11-17-2011 AI 47 SS 4 {Insiders nominal.}

TAL 11-29-2011 SS 7 AI 53 {Insiders nominal.}:

TAL International: A Terrific Company - Seeking Alpha

Yahoo! Message Boards - TAL International Group, Inc. - EPS $ .54?
They made .54 vs .38 last year after adjustments for swaps
last quarter .70 vs .17.

Cash increased recently/

Depreciation creates a non cash charge.

Dividend is .52 vs .5 last quarter and .3 last year.

Company does not foresee major recession risk or default of a major customer.

Sales increased from Dec 10 alot more than the increase in Accounts Receivable. ( Positive) -- unless I am reading something wrong?

Company expects flat to down results from this quarter with the next.

Last year 4 th quarter they made 1.15 vs op income of .76 due to gain on swaps.
TAL says flat to down next quarter pre tax op income of $1.56.
As long as Europe and the US experiences no hard landing recession, TAL's payout of .52 a share will hold up.
People sold this one off anticipating recession.

I sold out months ago at 28.5 and 27.5 but did not buy back at 23 or higher. Spooked by the macros. TAL in 08 09 ELIMINTED the div! Stock went to 9 or less.

MACRO looks better, high dividend of 7.5 % plus looks good, but don't expect much capital appreciation from this point.

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