Hailing a cab takes on a whole new meaning, as Wall Street’s search for alpha has taken it to an unusual place—right out its front door.
Bloomberg reports that the surging price of New York’s taxi medallions (known to everyone outside of New York as licenses) and their promise of steady cash flows have investors interested, and bolstered shares of a company that finances their purchase to a four-year high.
“Investors are pooling funds to buy the 6-inch-wide aluminum disks affixed to the hoods of cabs after two of them sold for a record $1 million each last month,” Andrew Murstein, president of Medallion Financial Corp. (TAXI), told the news service. Shares of the New York-based firm have climbed 17% since the Oct. 19 sale, compared with a 6.4% gain for the Russell 2000 Financial Services Index.
“A lot of people have been loading up recently on medallions because they think it’s a safe asset,” Murstein said.