Boston, MA 09/08/2014 (wallstreetpr) – FreightCar America, Inc. (NASDAQ:RAIL) and other rail stocks including Greenbrier Companies Inc (NYSE:GBX) and Trinity Industries Inc (NYSE:TRN) are having a great 2014 year. Despite the strong run up in the year, Sterne Agee transportation analyst Sal Vitale considers the rail stocks as a hot investment. Greenbrier has posted gains of more than 126% year to date whereas Trinity has posted gains of more than 80% in this year. FreightCar is up 16% so far this year.
Cherry picks
Vitale finds all the three stocks as top picks in the sector. All the three companies have got strong fundamentals making them an attractive buy at the current valuations. The strong rail car volume is the base of continuing growth in the rail stocks. Vitale expressed his views on CNBC’s most popular show Street Signs, telecasted last week.
A strong base
Vitale mentioned the key points of the sector. The rail car traffic has posted growth of 5% across the board in the current year and also among all different commodities. The significant growth is noticed in petroleum car loadings which are up by more than 20% in the year. The rail car productivity is posed with new challenges as the industry has got low volume of additional rail cars in storage. There is a higher need of rail cars to transfer high quantity of goods.
The ratings
Vitale finds street estimates on Trinity Industries Inc (NYSE:TRN) and Greenbrier as modest. He has got a “buy” rating on Greenbrier Companies Inc (NYSE:GBX), Trinity and FreightCar. The shale boom is supporting the rails stocks and any disappointment arising from the shale boom will leave a negative impact on rail stocks. Also, the rail industry is the key indicator of economic health. Out of the three companies, FreightCar America, Inc. (NASDAQ:RAIL) is a small cap stock but still it attracts investors as it is a sustainable and healthy dividend paying Railcar Company.
