Bowlin Travel Centers (BWTL)

this is old news i guess.

somehow i posted this story here on the blog but it never got posted.

i short..

2.60 book value, all tangible.

10 x earnings.

7-8 x free cash flow multiple..

earning a good 15 to 20 cents in any given year.

as a spinoff, way underfollowed.

also WAY SMALL. so i guess who cares aobut such nano cap spinoffs these days!!!!

i do.

there does not seem to be a whole lot of risk priced into this name at this juncture.

the comapny is overcapitalized. already sittign on 2 milion in cash. net debt is now 2.2 million. they last 12 months reduced debt by 1 million. way to go. for a nano cap company.

the key to this story is that they have been for 4 or 5 years in the public markets as spinoff and have been spending a full 4 yeras on major capital refurbishment. i think they spend something liek 4 or 5 million in capex during this time period. highway was expanded on their travel center/gas stations. in principle a bullish sign but it meant business interruption for them. they decided to take advantage of this and renovate all their facilities, plus they added one new gast station. going from 11 to 12..

so after huge capex program 2005 was the first clean year with normal capex and normal operations. without major highway projects going on in their backyard.

teh results are not bad. but i guess give them 1 or 2 more years, and the market will catch up with this is teh market gives much for such a nano cap comapny.

if id doesnt withint a 2 year time frame, i would anticipate teh copany to have zero net debt and about 3 bucks in book value. at that point the company should consider a return of capital to shareholders if nothgin better comes to mind with that deleveraaged balance sheet.

now this is a play on the southwestern markets. demographics are favorable and so are the traffic pattern in the area.. figure why anyone expanded the highways from 2 to 3 lanes. not because of the mexican immigrants, or perhaps yes. but certainly because more traffic on the AZ and NM roads.

given that this is a travel center/gas station biz, growing traffic numbers is all i care for a bullish long term thesis on this investmetn. the clean balance sheet helps as well.

the comapny is managed by a family with solid heads on their shoulders and some track record of returning cash to shareholders. i think tehy did some 5 years ago a special dividend to shareholder amounting to liek 4 or 5 bucks per share. .. so its not like the bowlins are greedy bastards. a common risk with micro cap, or nano cap companies. here we seem to have some hardworking folks at work.. unfortunately their comapny just has 12 millio in equity and creates 650K in profit and 1 million in free cash flow.

not somethign to enthuse the general wall street populace, but perhaps in time, people will flock to such companies again with no real risk in their balance sheets etc, and which continue to generate money. right now with a 5 to 6% ROE>. but with an anticipated recap in next 2 years, this ROE could be improved to double digits. in my humble opinion.

up to you do do due diligence on this nano cap..

think it deserves a smallish allocation and tuck in and forget that you own it.

one day you wake up and see that bowlin sells their 100 gas station biz to Lukoil or some Citgo. or some other company looking to expand in US..

by that time i guess it is too late to jump on the bandwagon.