When last I wrote on Greenbrier (NYSE:GBX),
I was, at best, tepid on this manufacturer of rail cars and parts for
the railroad industry. Although the environment for railroad capex is
pretty solid as major carriers like Union Pacific (NYSE:UNP), CSX (NYSE: CSX), and Norfolk Southern (NYSE:NSC) continue to enjoy solid operating cash flows (despite struggles in the coal business), Greenbrier has long lagged rivals like Trinity (NYSE:TRN) and American Railcar (Nasdaq:ARII) in terms of metrics like margins despite good market share.
Management has been saying the right things about prioritizing margins
and reducing the capital intensity of the business. Along those lines, a
serious restructuring of the Wheel and Parts business is a good move
forward, and the new emphasis on tank cars should pay dividends. But as
this quarter proves, this is a company where I think investors need to
be careful about giving too much benefit of the doubt ahead of real
signs of progress.
Please follow this link to continue:
http://www.investopedia.com/stock-analysis/070313/greenbrier-comes-short-again-gbx-trn-brka-arii.aspx
Showing posts with label American Railcar. Show all posts
Showing posts with label American Railcar. Show all posts
Wednesday, July 3, 2013
Thursday, April 4, 2013
Investopedia: A Thick Order Book Is Only Part Of The Story For Greenbrier
There are certain industries were achieving sustainable economic returns
and steady equity appreciation is nearly impossible, and rail car
manufacturing seems to be one of them. Among the major manufacturers, a
list that includes Greenbrier (NYSE:GBX), Trinity Industries (NYSE:TRN), American Railcar (Nasdaq:ARII) and FreightCar (Nasdaq:RAIL), two straight years of double-digit operating margins and/or return on invested capital is exceedingly rare.
With that in mind, investors would probably do well to approach Greenbrier with caution. While the company's move into tank car manufacturing should lead to higher revenue as crude oil producers turn to rails to move their product, the company has its work cut out to improve long-term margins and returns on capital. Although there could still be a trading opportunity in these shares, investors considering a long-term commitment should take a long look at the very poor historical industry returns.
Read more here:
http://www.investopedia.com/stock-analysis/040413/thick-order-book-only-part-story-greenbrier-gbx-arii-trn-rail.aspx
With that in mind, investors would probably do well to approach Greenbrier with caution. While the company's move into tank car manufacturing should lead to higher revenue as crude oil producers turn to rails to move their product, the company has its work cut out to improve long-term margins and returns on capital. Although there could still be a trading opportunity in these shares, investors considering a long-term commitment should take a long look at the very poor historical industry returns.
Read more here:
http://www.investopedia.com/stock-analysis/040413/thick-order-book-only-part-story-greenbrier-gbx-arii-trn-rail.aspx
Wednesday, December 19, 2012
Investopedia: Icahn Has Another Go At Greenbrier
If Bravo ever needs to recast "Millionaire Matchmaker," their producers ought to consider giving Carl Icahn a call, as it seems like Icahn likes nothing more than to try to land opportunistic M&A deals. In his latest attempt, Icahn is proposing (via his listed company Icahn Enterprises LP (Nasdaq:IEP)) that his majority-held American Railcar Industries (Nasdaq:ARII) acquire fellow railcar builder Greenbrier (NYSE:GBX).
As is so often the case with Icahn-proposed deals, though, the deal is
long on logic and short on value for the selling shareholders.
Please continue here:
http://www.investopedia.com/
Please continue here:
http://www.investopedia.com/
Monday, April 9, 2012
Seeking Alpha: Greenbrier's Thorny Valuation
Rail traffic may be a little twitchy these days as coal shipments plunge, but railroads and railcar leasing companies continue to rebuild their fleets after a major plunge during the recession. While Greenbrier (GBX) undoubtedly has a lot to gain from this multi-year cycle, the question of fair value gets a little tricky.
Another Strong Quarter
Certainly Greenbrier is making hay while the sun shines. Revenue jumped 60% this quarter as the company saw a 68% increase in car deliveries. More specifically, the company saw a better than 100% increase in car manufacturing revenue, while wheel service/refurbishment revenue rose about 7% and revenue from the leasing operations rose about 15%.
Profitability also dramatically improved as the company better covers its fixed costs. Reported operating income came close to tripling, while adjusted EBITDA more than doubled. All in all, the company handily surpassed the average sell-side EPS estimate, though the outperformance in revenue was not quite as large.
Read more here:
Greenbrier's Thorny Valuation
Another Strong Quarter
Certainly Greenbrier is making hay while the sun shines. Revenue jumped 60% this quarter as the company saw a 68% increase in car deliveries. More specifically, the company saw a better than 100% increase in car manufacturing revenue, while wheel service/refurbishment revenue rose about 7% and revenue from the leasing operations rose about 15%.
Profitability also dramatically improved as the company better covers its fixed costs. Reported operating income came close to tripling, while adjusted EBITDA more than doubled. All in all, the company handily surpassed the average sell-side EPS estimate, though the outperformance in revenue was not quite as large.
Read more here:
Greenbrier's Thorny Valuation
Friday, December 10, 2010
Rail Traffic Points To An Ongoing Recovery
For the pessimist crowd of economists looking for a double-dip recession, rail traffic is proving to be a decidedly inconvenient truth. With November numbers in hand, it is pretty clear that the industrial sectors of the North American economy are continuing a slow (and decidedly unspectacular) recovery. Although the pace of growth is clearly moderating, traffic and utilization suggests that the major rail carriers can continue to see solid demand for the near future and that is a positive look-through for the economy as a whole.
The Details of November
According to the Association of American Railroads' Rail Time Indicators, U.S. rail traffic grew 4.5% in November, while intermodal traffic increased 11.3%. On a sequential basis, seasonally adjusted traffic fell 1.1% from October, while intermodal was down 0.4%. It should be noted that an October-November decline is normal and completely consistent with the trend of past years. Once again, though, Canada was even stronger, as rail traffic rose more than 5% and intermodal increased 13%. (For more, see Railroad, Trucking Earnings Growth Set To Keep Rolling.)
Once again, rail traffic performance was broad-based. Although agricultural products and auto traffic were both down, that again is normal for this time of year. In other words, there is no particular reason for investors in Ford (NYSE:F), Toyota (NYSE:TM) or Archer Daniels Midland (NYSE:ADM) to see any bad news in these numbers.
Of more interest to this analyst was the performance of coal. To give investors an idea of just how important coal is to the railroad industry, remember that coal represented 46% of total American railcar traffic in November. So while there are differences between Union Pacific (NYSE:UNP), Norfolk Southern (NYSE:NSC) and CSX (NYSE:CSX) in terms of the exact breakdown of their traffic, coal is important to everybody.
The following link leads to the full piece at Investopedia:
http://stocks.investopedia.
The Details of November
According to the Association of American Railroads' Rail Time Indicators, U.S. rail traffic grew 4.5% in November, while intermodal traffic increased 11.3%. On a sequential basis, seasonally adjusted traffic fell 1.1% from October, while intermodal was down 0.4%. It should be noted that an October-November decline is normal and completely consistent with the trend of past years. Once again, though, Canada was even stronger, as rail traffic rose more than 5% and intermodal increased 13%. (For more, see Railroad, Trucking Earnings Growth Set To Keep Rolling.)
Once again, rail traffic performance was broad-based. Although agricultural products and auto traffic were both down, that again is normal for this time of year. In other words, there is no particular reason for investors in Ford (NYSE:F), Toyota (NYSE:TM) or Archer Daniels Midland (NYSE:ADM) to see any bad news in these numbers.
Of more interest to this analyst was the performance of coal. To give investors an idea of just how important coal is to the railroad industry, remember that coal represented 46% of total American railcar traffic in November. So while there are differences between Union Pacific (NYSE:UNP), Norfolk Southern (NYSE:NSC) and CSX (NYSE:CSX) in terms of the exact breakdown of their traffic, coal is important to everybody.
The following link leads to the full piece at Investopedia:
http://stocks.investopedia.
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