Sam Zell was given the title 'Grave Dancer' for his many value purchases over the years. He is ever the contrarian. Many times we look at ideas from 13F filings on what other long term successful investors are buying. Chai Trust, a Sam Zell entity, has been accumulating shares of American Commercial Lines (ACLI). ACLI has struggled as the volume of commodities on its barges have fallen. ACLI has fallen from a high of $39.88 to a low of $12.60. The earnings estimate is .92 cents [TTM] and a PE of 18.78 [TTM]. Running our quick litmus test of value, we come up with a very rough number of approx value of about $20.00. In the last several days, there has been big upside action (like so many shares).
The ACLI runs two divisions: one a transportation division, and the other a manufacturing entity with 60 years of experience in the field. ACLI is the second largest provider of both dry and liquid cargo barge transportation on the United States Inland Waterway System. ACLI owns 12,000 miles of connecting waterways. (Seems like a nice moat, as Mr. Buffett would say, no pun intended). ACLI is America’s largest inland shipbuilder and repair facility, and its subsidiary, JeffLabs, the industry’s technological innovator. Jeffboat spans 68 acres of land and 5,600 feet of frontage on the Ohio River in Jeffersonville, Indiana. It is an industry leader in marine design and construction for both inland and ocean service vessels, offering custom barge design and manufacturing, marine repair facilities and leading-edge research and development.
What is one of the most interesting points is that 1 barge is equivalent to 15 railroad cars - Do you remember who was a buyer of railroads this years?...Warren Buffett - as well as equivalent to 80 truck loads. It is very easy to see there is an immense saving for shippers using barges.
As in so many other times, we have seen panicked sellers unloading shares, and for long term success, one needs to go against the collective intelligent grain. We do not own any shares of ACLI, but it is on our watchlist.