Patriot Transportation Is A Forgotten Undervalued Spin-Off

Patriot Transportation (PATI) is a top tier regional tank truck hauler servicing the southeastern United States. FRP Holdings spun-off Patriot Transportation during January 2015 and began trading under the symbol PATI. However, they began as a premier bulk tank carrier in 1962 under the name Florida Rock and Tank Lines. Florida Rock and Tank Lines continues its growth as an industry leader in the southeastern United States, transporting petroleum and other liquid and dry bulk commodities in tank trucks.

Patriot Transportation operates under their one subsidiary, Florida Rock, and Tank Line. They specialize in hauling petroleum (82% of revenue), dry bulk and other liquid commodities(18% of revenue).

The tank lines transportation business is highly fragmented. This attribute offers PATI exciting growth opportunities with its strong balance sheet, free cash flow, clean capital structure and committed bank financing to benefit from industry consolidation. Ranked #12 in US by revenue per the 2013 Bulk Transporter's Gross Revenue Report. Number one of the top 3 tank truck haulers in the markets they generate 66% of their revenues. 

   Current Valuation:

Patriot Transportation is a value outlier based on asset reproduction and earnings power. They have 21 terminals, 9 satellite locations,488 Tractors and 563 Trailers located in Florida, Georgia, North Carolina, South Carolina, Alabama, and Tennessee. Terminals owned in Florida (Jacksonville, Panama City, Pensacola, Tampa, White Springs) Georgia (Albany, Augusta, Bainbridge, Columbus, Doraville, Macon) and Tennessee(Chattanooga, Knoxville). Additionally, the company owns 468 tractors and 561 tank trailers. During fiscal 2016, the Company purchased 78 new tractors and 24 trailers. Further, its current financial position reports 6.87M cash, 6.44M current account receivables, for a total current asset value of 17.95M. Gross PPE of 102.19M or net value of 41. 38M. The total equity value is 45.82M or $13.89 per share with no debt. 

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Disclosure: Long: PATI

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