Trencor’s fate tied to the
Trencor is an investment holding company that focuses on owning, leasing, managing and reselling marine cargo containers worldwide as well as related financing activities. Trencor has two segments: container finance as well as container owning, leasing, management and reselling. Its subsidiaries include Textainer, Trencor Services, Trencor Containers and TAC. After a 59% drop in 2007 until 2008, Trencor managed to recover all its losses and maintain a steady uptrend. Being a dollar-earning company through its 48.3% beneficiary interest in Californiabased Textainer, which is listed on the New York Stock Exchange, a stronger rand was beneficial for Trencor – it inf lates earnings priced in dollars when converted back into the local currency.
All the dividends issued from April 2013 made Trencor even more attractive to investors; Trencor issued a final gross cash dividend of 150c/share out of distributable reserves based on the financial year ended 31 December 2012, and declared a special gross cash dividend of 360c/share out of distributable reserves. An additional interim gross cash dividend of 72c/share out of distributable reserves in respect of the six months ended 30 June 2013 was paid in September 2013.
Textainer recently announced that it had been awarded a con- tract by the US Department of Defence Container Management for the year starting on 24 December 2013, with potential for renewals. Trencor also acquired about 30 000 t wenty-foot equivalent units (TEU) of standard dry freight containers from its managed fleet, increasing the percentage of Textainer’s owned fleet to 77%. POSSIBLE OUTCOME: Trencor has been trading within a symmetrical triangle since March 2013, which runs parallel to when the rand started to weaken gradually from 9 000 to 11 380. This sideways momentum may continue until a breakout in either direction occurs. Because the relative strength index (RSI)