SBS Transit currently has a market capitalization of $802 mil with 311 mil in outstanding shares. This is one company that I have invested in at $1.30-$2.00 in the past.

The story is panning out, not exactly as what I anticipated, but its close enough. There were much focus on the selling of the bus fleet back to the government but in my opinion, the attractiveness of SBS is to return to the situation in 2000-2001 time.

Back then, SBS have manageable capital expenditure and was able to pay a very controlled 5% dividend yield. When the bus capital expenditure increases to a new normal, they have a problem there.

A move to the government contracting model will be able to move all these off their financials. They still have the costs which are indexed to inflation, but they are not subjected to fuel cost fluctuations and capital …