Bill Gunderson

About the Author Bill Gunderson

Bill Gunderson is the CEO and Chief Market Strategist of Gunderson Capital Managment in San Diego, CA. He is also a professional money manager, former research analyst, author of Best Stocks Now, and developer of the Best Stocks Now smartphone app. He offers four free weeks to his weekly Best Stocks Now to Seeking Alpha readers. http://www.pwstreet.com He also hosts a daily stock market radio show on AM1000 KCEO from 7am-8am. http://www.kceoradio.com Bill has appeared on the Fox Business Channel and on Bloomberg radio numerous times. He has been published in Barron's, Forbes, TheStreet.com and numerous other publications i.e. Los Angeles Business Journal, San Diego Union Tribune, Phoenix Business Journal, Salem News, Rochester Business Journal, and many others.

I Continue To LOVE Railroad Stocks Like This One


The Greenbrier Companies (NYSE:GBX) manufactures rail cars. The company was founded back in 1974 and is headquartered in Lake Oswego, Oregon. It may not be Alibaba (NYSE:BABA), but rail car makers are doing pretty well these days thanks to the strong demand driven by the domestic energy boom and an ever-improving economy.

Greenbrier stock is trading at new highs after announcing it has received orders in Q4 for 15,000 railcars worth $1.37 billion. The company’s CEO attributed the strong results to strength in automotive, agriculture, and energy, but added “the importance of the energy renaissance in North America cannot be understated.”

There are simply not enough pipelines to transport all the oil being produced domestically. Energy companies need to transport oil to the Gulf of Mexico for refining. And since new pipelines like the proposed Keystone pipeline have met resistance from legislators and environmentalists, the only current reasonable method of transportation is by rail car.

Just take a look at the stock price which is up more than 130% year-to-date!

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Last April, the Obama Administration announced that the review of theĀ Keystone XL pipeline had been extended indefinitely pending the results of legal challenges to the Nebraska pipeline. It seems unlikely that the pipes will be flowing with oil any time soon! This may not be great news for domestic energy producers, but it is good news for the rail car manufacturers and railroad companies in general.

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Proposed Keystone XL Pipeline Route

But that is not the only catalyst that is driving new business to Greenbrier. The government is expected to institute new tank car safety regulations. The sweeping regulations, the first changes to crude-by-rail rules in decades, call for a phase-out within two years of the use of legacy DOT-111 tank cars for transporting highly flammable liquids, including Bakken crude and ethanol.

As the proposed regulation currently stands, 70% of the country’s tank-car fleet would have to be phased out over a two-year period. A more likely scenario is that much of the existing fleet will be retrofitted to meet new safety standards. Did I mention that Greenbrier also makes rail-car parts?

So given all the factors driving new business for Greenbrier, let’s take a closer look.

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Data from Best Stocks Now app

Greenbrier is a small cap company with a market capitalization of $2.1 billion. The stock is most appropriate for Aggressive investors.

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Data from Best Stocks Now app

A lot of the positives associated with the stock are tied to recent developments. The company was growing at a 5 year average growth rate of 12%, but that growth rate is accelerating. The company’s forward P/E is currently more than 18 which gives it a Value Grade of C-.

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Data from Best Stocks Now app

The stock’s growth potential has only translated into stock return over the last couple of years, tied to the prospects of the domestic energy boom. The stock produced a negative return in 2012, but has posted stellar returns the last couple of years, far in excess of the market as a whole. Given its recent trend, it gets a momentum grade of A+ and a performance grade of A.

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Data from Best Stocks Now app

Greenbrier stock currently ranks #61 out of more than 3800 stocks in the Best Stocks Now universe. It receives an overall stock grade of A. It is the perfect example of an underlying theme in the market being captured by the Best Stocks Now app.

Greenbrier may not be garnering as much investment excitement as Alibaba, but it has a lot going for it as well!

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According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Bill Gunderson has a total average return of 5.8% and a 59.6% success rate. Gunderson has a 4.6% average return when recommending SLXP, and isĀ ranked #676 out of 3866 Bloggers.

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