The Engines That Can, and Are: Why Greenbrier Is a Buy

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Greenbrier Cos. Inc. (NYSE:GBX) caught my attention after it absolutely trounced earnings estimates. This company isn’t exactly a household name, but it is well known to market veterans. The company designs, manufactures, and markets railroad freight car equipment in North America and Europe, and has done a marvelous job in an economy that continues to limp along.

Digging a bit more into the company, Greenbrier’s manufacturing segment offers double-stack intermodal railcars, tanks cars, auto-max railcars, multi-max auto racks, flat cars for automotive transportation, and conventional railcars such as boxcars, covered hopper cars, flat cars, center partition cars, bulkhead flat cars, and solid waste service flat cars. It also produces pressurized tank cars, non-pressurized tank cars, gondolas, coil cars, coal cars, sliding wall cars, and automobile transporter cars. Finally, it offers marine vessels like conventional deck barges, double-hull tank barges, railcar/deck barges, barges for aggregates, and other heavy industrial products and dump barges.

The company’s wheels, repair, and parts segment provides wheel services, including reconditioning of wheels and axles, new axle machining and finishing, axle downsizing, and heavy railcar repair and refurbishment, as well as routine railcar maintenance, repair, and refurbishment of railcars for third parties. This segment also reconditions railcar cushioning units, couplers, yokes, side frames, bolsters, and various other parts, as well as produces roofs, doors, and associated parts for boxcars.

Greenbrier’s leasing and services segment offers operating leases and “by the mile” leases for a fleet of approximately 8,600 railcars. It also offers management services, including railcar maintenance management, railcar accounting services, fleet management, administration, and railcar re-marketing. This segment owns or provides management services to a fleet of approximately 232,000 railcars.