Our opinion on the current state of TRENCOR(TRE)Trencor's (TRE) primary asset is its 47.78% ownership of Textainer, a US-listed company specializing in the rental of shipping containers (Twenty-foot Equivalent Units or TEUs). Notably, Trencor spent R100 million buying back its own shares between 4th October 2018 and 6th December 2018. Investors have expressed dissatisfaction with Textainer's performance compared to its competitors. For instance, Triton had a return on equity of 16%, while Textainer's was only 1.7%.
Trencor has unbundled its holding of Textainer into the hands of its shareholders, resulting in a tax liability of R17 million. In its results for the year to 31st December 2023, the company reported headline earnings per share (HEPS) of 71.5c, a significant increase from 1.7c in the previous period. The company's net asset value (NAV) rose to 813c per share.
However, in a trading statement for the six months to 30th June 2024, the company estimated that HEPS would fall by between 84.6% and 86.1%. The company noted, "The SA rand/US dollar exchange rate at any point in time can have a material impact on basic earnings and headline earnings per share."
The share has an average daily trading volume of R660,000, making it practical for investment. Additionally, the share is in an upward trend, which may be appealing to potential investors.
