- Greenbrier is an excellent way to play US economic growth and now Brazilian economic growth.
- With the recent earnings guidance increase, the company is trading at a very reasonable price.
- The company is an inexpensive way to "play" the growth in rail demand. It manufactures, leases railcars and now has a 50/50 stake in North America's largest repair network.
Greenbrier: Cheap Stock With Strong Railcar Earnings Potential For 2015
- GBX shares have fell more than 31% from the September highs due to its energy exposure.
- In the last year, the company has began to rely less on oil & gas, now representing just over 1/4th of the total backlog from about half.
- Greenbrier's FY15 EPS guidance boost puts the stock at a P/E ratio under 10x.
- GBX added another $25M to the buyback plan, which will likely be used more aggressively with the stock off more than $25 from the all-time highs.
- It acquired a stake in a South American railcar company to further diversify the business.
The Greenbrier Companies' Stock Is Soaring Following Its Q1 Earnings Release - Should You Buy Now?
- Q1 2015 earnings were released on January 7.
- Earnings per share surpassed expectations, but revenue fell short.
- Raised its full year outlook on fiscal 2015.
- The stock has responded by rising more than 10%.
Greenbrier: 3-Point Strategic Plan Launched 3 Years Ago Is Bearing Fruit
- Greenbrier's strategic plan a success: FY14 revenue was up 25%; gaining market share; gross margins (17.2% in Q4) are expanding.
- Order growth is robust; company has a near 2-year backlog with over $3.4 billion in FY14 orders.
- Midpoint of FY15 guidance is for EPS=$4.40; a 15 multiple gets you a $66 stock next year (+28%).
- In addition, shareholders should see higher dividends and stock buybacks. GBX is a STRONG BUY.
- Greenbrier delivered revenue growth of 4.2% during its latest quarter. Earnings grew by 49%.
- The market under which the company operates is undergoing massive expansion.
- A heavy backlog will ensure that the revenue trend sustains ahead.
- The company is undervalued by 52%.
GBW Railcar Services: Well Positioned To Profit From New Safety Standards
- Greenbrier and Watco LLC's GBW Railcar Services is strategically positioned to profit greatly from significant new safety regulations for the transport of crude by rail.
- Independent of significant new regulations, GBW Railcar Services' expansive network of repair and maintenance shops will provide critical recertification and maintenance services to the significant number of aging DOT-111 cars.
- Rail transport of crude will remain a necessity even with significant pipeline infrastructure investments.
Bakken Update: Greenbrier's Pullback Has Provided A Buying Opportunity
- Greenbrier's stock price has pulled back 31% from its 52-week high.
- 8% of all US crude production is transported by rail.
- There is significant upside to tank car retrofits and phase outs.
- Railroads and tank car manufacturers may be somewhat insulated to a temporary pullback of oil prices.
- The rails have been a better fit to transport crude as set-up times and costs are lower than pipelines.
- Rail car manufacturers are benefiting from the domestic energy boom.
- With a limited pipeline infrastructure to transport oil, the only reasonable method of transport is by rail car.
- New proposed safety regulations tied to energy transport are also driving new order flow.
Greenbrier's 22% Upside Is Backed By A Strong Backlog And Industry Growth
- Greenbrier’s latest quarter brought an improvement of 37% in the top line. Loss converted into profit.
- The railcar market is expanding, which has resulted in a low volume of spare rail cars.
- Benefiting from the trend, Greenbrier has grown its backlog of orders.
- Expansion in service and repair segment will help in servicing over-utilized rail cars.
The Greenbrier Companies - On Track To Brighten Your Future
- GBX is a leading manufacturer of railroad freight cars in North America and Europe that has seen shares more than double in 2014.
- The company trades at less than 1x revenue and 17x FY’15 EPS, with 33% earnings growth and could be worth over $100 per share.
- Current shortages of railcars in North America for shipping oil and automobiles will provide future earnings growth for the industry.
- The proposed legislation to come in North America for safer tank cars will increase overall orders and add to the existing backlog.
Greenbrier Companies - Appeal Relies On The 'Structural' Change In A Traditionally 'Cyclical' Industry
- Greenbrier's shares continue to see great momentum, having already doubled in 2014.
- Strong margin expansion, topline revenue growth and a huge order intake drives momentum.
- Potential appeal of the company's shares relies largely on the structural changes in demand for railcars, in what has traditionally been a cyclical industry.
The Greenbrier Companies: A Good Trade At These Levels
Tue, Jan. 13, 8:19 AM
- A positive outlook on the railroad sector is issued by Cowen Research after a Q4 survey.
- The investment firm notes that the drop in crude shipments in the sector is being offset by pent-up demand in other commodities and capacity pressure in other transportation modes.
- Railroad stocks: UNP, NSC, CSX, CNI, ARII, GBX, CP, KSU, CNI, WAB, TRN.
Thu, Jan. 8, 12:49 PM
- Greenbrier (GBX +2.8%) is upgraded to Buy from Hold with a $66 price target at Stifel following strong FQ1 earnings and guidance, citing added confidence about GBX's margin enhancement and return-on-capital improvement initiatives in the manufacturing and repair/wheels segments.
- DA Davidson maintains its Buy rating, saying recent concerns over potential cancellations related to oil price declines are overblown and noting that inevitable new tank car safety regulations are not contingent upon energy prices (Briefing.com).
Wed, Jan. 7, 7:05 AM
- Greenbrier (NYSE:GBX) reports gross margin rate rose 524 bps to 17.79% Y/Y in FQ1.
- Segment sales: Manufacturing $379.95M (+5.70%); Wheels & Parts: $86.62M (-23.61%); Leasing & Services: $28.49M (+62.95%).
- The company says it saw 4,000 new railcar deliveries in the quarter, down 16.67% Q/Q.
- New railcar manufacturing backlog was 41,200 units valued at $4.20B at quarter's end, vs. 31,500 units valued at $3.33B as of Aug. 31.
- The company received orders for 14,100 new railcars during the quarter.
- FY2015 Guidance: Deliveries: ~21,500 units; Revenues: ~$2.6B; Diluted EPS: $5.20 to $5.50.
Wed, Jan. 7, 6:03 AM
Tue, Jan. 6, 5:30 PM
Dec. 8, 2014, 7:02 AM| 1 Comment
Oct. 30, 2014, 6:12 AM
Oct. 29, 2014, 5:30 PM
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Oct. 15, 2014, 1:07 PM
- CSX (CSX -2.5%) CEO Michael Ward wasn't taking part in any bubbly speculative talk about railroad mergers during the firm's earnings call this morning.
- The exec says regulators would be very cautious about a large merger due to disruptions in the past after high-profile combinations.
- Earnings call webcast
- Related stocks: UNP, NSC, CNI, ARII, GBX, CP, KSU, CNI.
Oct. 10, 2014, 10:58 AM
- After meeting with railroads, car builders and shippers, Wells Fargo says the industry's order environment remains healthy and rail supply names should be bought on recent weakness (Briefing.com).
- The firm keeps an Outperform rating for rail supply companies Greenbrier (GBX -2.3%), Trinity Industries (TRN -4.3%) and Wabtec (WAB -0.7%), and believes concerns about potential tank car regulations and longevity of crude by rail were the primary drivers behind recent declines.
Oct. 1, 2014, 6:49 PM
- Railcar makers sold off today after railroad and oil lobbyists asked the government to delay the imposition of new rules that would require the use of safer railcars for hauling crude oil: GBX -10.2%, TRN -7.7%, ARII -5.9%, RAIL -4.2%.
- Jim Cramer sees a potentially "disastrous" situation for the railcar companies, warning that extended battle could weigh on earnings expectations.
- UBS analyst Eric Crawford says it should not have come as a surprise that the users of railcars want more time, as it indicates how important the transportation of crude by rail has become; it also shows there is not an oversupply of tank cars, and the lobbyists' position should lessen worries that railcar orders are at risk of being cancelled.
Sep. 30, 2014, 6:35 PM
- Proposed U.S. rules to make hauling crude oil by rail safer would drive up costs and put the U.S. energy revival at risk, trade groups representing the oil and railroad industries say.
- Jack Gerard, president of the American Petroleum Institute, says his group and the Association of American Railroads are jointly asking the U.S. Transportation Department for 6-12 months for rail tank car manufacturers to gear up to retrofit tens of thousands of cars, another three years to retrofit older cars, and three years after that to retrofit newer tank cars manufactured since 2011.
- Tank car maker Greenbrier (NYSE:GBX) says it can meet the government timeline; without an aggressive timeline, it says companies won’t move quickly enough toward safer standards.
- Other rail car makers include TRN, ARII, RAIL, WAB.
Sep. 22, 2014, 1:03 PM
- The amount of oil riding on railroads has risen to 1.6M barrels a day, according to data from the Energy Information Administration.
- Revenue for hauling crude has skyrocketed 833% to $2.15B in just five years.
- Analysts think the infrastructure investments made within the industry will provide continued benefits for the group.
- Railroad stocks: UNP, NSC, CSX, CNI, ARII, GBX, CP, KSU, CNI.
Sep. 17, 2014, 7:47 AM
- Greenbrier (NYSE:GBX) says it received new orders for 15K railcar units valued at $1.37B during its FQ4 ended Aug. 31 through the present date.
- In addition, GBX received a recent deck cargo barge order which brings total marine backlog to $112M and extends its marine backlog to 2016.
- Says it has received orders for nearly 39K railcars in North America and Europe valued at $3.72B since Sept. 1, 2013.
Aug. 19, 2014, 7:01 PM
- Canada's transportation safety agency says inadequate Canadian government oversight and a now-defunct railway company's "weak safety culture" were among a host of factors that led to last year's devastating oil train derailment in Quebec.
- The agency, which issued its final report on the accident that killed 47 people, says a similar catastrophe could happen again unless more measures are taken to boost rail safety, as crude-by-rail shipments in Canada and the U.S. skyrocket as energy companies try to compensate for a lack of pipeline capacity.
- The report says “all older Class 111 tank cars must not transport flammable liquids, and a more robust tank car standard with enhanced protection must be set for North America."
- Shares of companies that manufacture railway cars finished mostly higher today: ARII +2.6%, GBX +2.3%, TRN +1.8%, RAIL -0.2%.
Aug. 13, 2014, 11:29 AM
- Proposed U.S. regulations on hauling flammable liquids threaten to aggravate a shortage of railcars for transporting oil, as thousands of tank cars are likely to be scrapped or redeployed, according to a WSJ report.
- With production capacity for new tank cars ~35K cars/year and cars ordered today unable to be filled until 2016 at current production rates, industry analysts say the railcar industry could have difficulty expanding production fast enough to accommodate the short time frames proposed by regulators for ushering out older tank cars for transporting flammable liquids.
- Questions remain about whether there is enough production capacity available to retrofit existing cars or replace them in time to comply with the government's schedule to phase out the older cars.
- TRN +3.1%, ARII +3.1%, GBX +2.3%, GMT +1.2%, RAIL +0.6%.
GBX vs. ETF Alternatives
Greenbrier Companies Inc designs, manufactures & markets railroad freight car equipment in North America & Europe, marine barges in North America and provides wheel services, railcar refurbishment and parts, leasing & other services to the railroad.
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