Convex Strategies

FreightCar America: Massive Cash Position, New Revenue Streams Mean Shares Could Double By 2015

FreightCar America (NASDAQ:RAIL) manufactures coal and bulk commodity cars and is based in Chicago, Illinois. Despite public consensus that the coal industry is dead, FreightCar America has nearly quadrupled its revenues since 2010 and maintained a very cash-rich balance sheet; cash makes up more than half of RAIL's market cap.

In 2012, the company delivered its highest number of coal cars since 2008; coal cars are typically responsible for more than 90% of total annual deliveries. RAIL is the largest supplier of aluminum-bodied railcars and has roughly 70% market share in coal cars, though it competes with Greenbrier (NYSE:GBX), Trinity Industries (NYSE:TRN), and Carl Icahn's American Railcar (NASDAQ:ARII).

Top-Down Analysis: Coal Is...

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