Seeking Alpha

Barron's: Oil tank-car makers could be poised to tumble

  • Oil tank-car makers such as Trinity Industries (TRN), American Railcar (ARII) and Greenbrier (GBX) may have overestimated demand, and their shares could be vulnerable to a 20%-plus drop, according to a weekend Barron's report.
  • Oil finds in places such as North Dakota have strained pipeline transport, creating the need for more trains, but by 2016 that need will be more than met, analysts say.
  • GATX (GMT) CEO Brian Kenney, whose leasing company owns the second-largest tank car fleet in North America, says there's eventually going to be an oversupply as the cars are delivered and as pipelines come online.
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Comments (3)
  • sherm8or
    , contributor
    Comments (8) | Send Message
    Given proposed regulations to increase structural integrity/design changes that will impact a large fleet of railcars, the added demand for maintenance modifications combined with a robust replacement cycle for new cars should bode well for years. Furthermore, this market is not limited to just CONUS. Global demand for railcars is increasing.
    18 Nov 2013, 10:14 AM Reply Like
  • Chancer
    , contributor
    Comments (3289) | Send Message
    Oil exploration and production is not static, but it is dynamic. When the current demand for railcars declines in a couple of years, there will be new areas of development with new demand.
    18 Nov 2013, 03:34 PM Reply Like
  • motertek32
    , contributor
    Comments (5) | Send Message
    CEO Brian Kenney of GATX ,says there's eventually going to be an oversupply. Keep vigilant for "eventually".
    18 Nov 2013, 05:41 PM Reply Like
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