Please ensure Javascript is enabled for purposes of website accessibility

Shares of Textainer Group Holdings Gained 37% in November

By Tyler Crowe - Dec 7, 2016 at 11:12AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

One might think that a company so deeply tied to global trade would suffer under a Donald Trump presidency, but that would not necessarily be true.

Image source: Getty Images.

What happened

In what has to be an ironic twist, shares of Textainer Group Holdings (TGH -0.20%) rose 37% in November. The biggest of those gains came on U.S. election day, which also happened to be the same day the company reported earnings for the most recent quarter. 

So what

Every once in a while, it seems like Wall Street is playing a joke on investors. If you look at both the election of Donald Trump and the company's most recent earnings results, you might immediately assume that shares of Textainer would be headed down the toilet.

In that release, CEO Phillip Brewer noted that Textainer lost 114,000 of its multimodal containers when shipping company Hanjin Shipping went bankrupt during the quarter. Many of those containers are sitting on ships that Hanjin has out in the water because it can't pay dock fees. Textainer had to take several million in writedowns on those assets and is in the process of recovering those containers.

The company expects to get 70%-90% of them back, but it will take several quarters to recover them. These lost containers and the possibility of an auction of Hanjin's assets lowering lease and sale costs of containers led Textainer to suspend its dividend for the foreseeable future. This isn't exactly the backdrop that would incite a double-digit gain in stock price.

If that weren't enough, Trump's election and some of his anti-trade rhetoric don't exactly bode well for Textainer, either. 

Now what

Textainer has a lot of issues to work through. The Hanjin Shipping bankruptcy is likely to have ripple effects across the entire shipping and container leasing markets for some time, and investors should have modest hopes for the upcoming quarters. Also, while we should take Trump's rhetoric with a grain of salt until we see tangible policies enacted, it's worth watching to see if some of this anti-trade sentiment leads to anything that can impact Textainer in the future. 

Tyler Crowe owns shares of Textainer Group. You can follow him at Fool.com or on Twitter @TylerCroweFool.

The Motley Fool recommends Textainer Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Textainer Group Holdings Limited Stock Quote
Textainer Group Holdings Limited
TGH
$34.09 (-0.20%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
389%
 
S&P 500 Returns
125%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.