Intermodal Shipping Leader Setting Up for Breakout Move with Bullish Open Interest
Triton (TRTN) nice small-cap name that has held up well and forming a bull flag just below recent highs with sizable open interest in the May $55 and $65 calls from buyers on 2/8. TRTN is flagging above its 8- and 21-EMA and has room to $75-$78 on the upside. The $4.2B company trades 6.4X earnings, 2.5X sales, and 39.5X cash with a 4% yield. The company engages in the acquisition, leasing, re-leasing, and sale of various types of intermodal containers and chassis to shipping lines, and freight forwarding companies and manufacturers. The company is the largest intermodal container leasing company in the world and the biggest supplier to most global shipping lines. TRTN has invested nearly $4B over the last two years and locked in a number of long duration, high IRR leases which further secures their scale and positioning as a ‘go-to’ supplier. They have a significant advantage over peers too with over 50% market share in a consolidating industry which gives them cost and service leverage. Analysts have an average target for shares of $80. B Riley positive on the name in October noting that higher container shipping volumes and port congestion are driving container demand. With more predictable underlying cash flows, Triton is well positioned to either raise its dividend or increase its share repurchase activity once the company’s capital expenditures normalize. Short interest is 1.85%. Hedge fund ownership fell 3% last quarter. Drierhaus Capital a buyer of stock.