Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, railcar manufacturer FreightCar America (Nasdaq: RAIL ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at FreightCar's business and see what CAPS investors are saying about the stock right now.
FreightCar facts
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Headquarters (Founded)
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Chicago (1901)
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Market Cap
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$172.2 million
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Industry
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Railroads
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Trailing-12-Month Revenue
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$262.2 million
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Management
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CEO Edward Whalen (since 2009)
CFO Joseph McNeely (since 2010)
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Return on Equity (Average, Past 3 Years)
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2.2%
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Cash/Debt
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$51.1 million / $0
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Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 95% of the 805 members who have rated FreightCar believe the stock will outperform the S&P 500 going forward. These bulls include djwhr1 and fellow Fool Sean Williams (TMFUltraLong), the sixth-ranked member in all of CAPS.
In a reply pitch from this past summer, djwhr1 summed up the FreightCar bull case:
The rail car industry is poised to grow. Oil is flowing in the Bakken and rail will be the primary way out for some time. This company has a low float and no debt, although they are in a capital intensive business and may need capital going forward. Given that [Warren Buffett] went into railroads tells me he sees growth here as well.
Currently, FreightCar even sports a paltry price-to-book ratio of 0.9. That represents a clear discount to other rail plays like CSX (NYSE: CSX ) (2.5), Kansas City Southern (NYSE: KSU ) (2.4), and Union Pacific (NYSE: UNP ) (2.4).
Sean expands on the outperform argument:
FreightCar America makes perfect sense here. Fuel prices are still high no matter what the pundits say. Oil prices at $80 are still a detriment to truckers and make rail travel far more fuel efficient. Someone needs to build those railcars that carry coal and other goods from point A to point B and FreightCar is that company. Carl Icahn is a shareholder and normally is instrumental at squeezing value out of his investments over time. ... The business model makes sense, now let's see if they can continue to execute.
What do you think about FreightCar, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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