5-Star Stocks Poised to Pop: Wabtec

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Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, railroad equipment supplier Westinghouse Air Brake Technologies (NYSE: WAB) -- aka Wabtec -- has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Wabtec's business and see what CAPS investors are saying about the stock right now.

Wabtec facts

Headquarters (founded)

Wilmerding, Pa. (1869)

Market Cap

$1.58 billion

Industry

Railroads

Trailing-12-Month Revenue

$1.57 billion

Management

President/CEO Albert Neupaver (since 2006)

CFO Alvaro Garcia-Tunon (since 2003)

Return on Equity (average, last three years)

20.3%

Competitors

Trinity Industries (NYSE: TRN)

FreightCar America

CAPS Members Bullish on WAB Also Bullish on

Johnson & Johnson (NYSE: JNJ)

Chesapeake Energy (NYSE: CHK)

Apple (Nasdaq: AAPL)

CAPS Members Bearish on WAB Also Bearish on

Wells Fargo (NYSE: WFC)

DryShips (Nasdaq: DRYS)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS.

Over on CAPS, some 98% of the 434 members who have rated Wabtec believe the stock will outperform the S&P 500 going forward. These bulls include naroowal99 and DepthMigration.

Three weeks ago, naroowal99 updated our community on a few positive developments:

One of the big things for Wabtec is that they are the leaders in the PTC (positive train control) technology. Congress has mandated that this technology be in the system by 2015 installed. Wabtec leads in the brake supplies and hence in the information for the brake distance. This will be $60 soon.

In a pitch from last month, DepthMigration hops aboard that bullish train of thought:

Absolutely one of my top picks. [Wabtec] is situated to take advantage of both the existing market for the rail industry by providing superior replacement/repair product, and of the future markets for more efficient rail and subway components. This is a financially conservative company, fair amount of cash on hand, and a much higher than average ROE.

What do you think about Wabtec, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Johnson & Johnson is a Motley Fool Income Investor pick, Chesapeake is an Inside Value selection, and Apple is a selection of Stock Advisor. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 30, 2009, at 11:02 AM, catoismymotor wrote:

    I must disagree. It has a ten year average annual growth of 10%. The dividend barely exists. If you are looking to catch a short term hop because of the required upgrading of braking systems them this might be a good fit. If you are like me and want something more substantial this is not the play for you.

  • Report this Comment On July 06, 2009, at 6:40 PM, Fool wrote:

    I thought Trinity and FCA were customers of Wabtec, not competitors. I thought NY Air Brake was Wabtec's competitor.

  • Report this Comment On July 22, 2009, at 8:42 PM, airbrakeman wrote:

    Wabtec is facing a declining market for freight railroad products that is likely to impact their revenues and profits. Freight car loadings are off 18% from 2007/08 levels putting over 300,000 surplus freight cars in storage along with hundreds of locomotives. Wabtec stock is likely to go lower before it goes higher and probably won't turn around until about one year after the economy turns up.....probably in 2011 or 2012.

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