Has TAL International Group, Inc. (TAL) Become the Perfect Stock?

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But for shipping investors seeking a profitable alternative to vessel owners, TAL has tapped into a lucrative niche in the shipping industry: intermodal containers. The company leases containers worldwide, helping shippers avoiding the capital expense of buying their own containers.

That business produced some strong results in TAL’s most recent quarter, as the company reported a 12% year-over-year increase in leasing revenues while making substantial investments in new container purchases. TAL also boosted its dividend by 3%, which was the fifth straight quarterly increase.

Yet the stock took a hit recently when TAL reported that several of its major shareholders will sell more than 4 million shares in a secondary offering. With the three selling shareholders completely eliminating their stake in the company, investors have to wonder if they’ve lost confidence in TAL or whether the sale just represents a normal exit by private equity investors.

For TAL to improve, it needs to start working on getting its balance sheet in order. With the shares valued cheaply and with a huge dividend yield, TAL stands a much better chance than most shipping-related stocks of progressing toward perfection in the years ahead.

The article Has TAL International Become the Perfect Stock? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned.

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