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Strategies & Market Trends : Value Investing

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To: Bart Hoenes who wrote (25971)2/11/2007 8:49:28 PM
From: Carey Thompson  Read Replies (1) of 78670
 
Here is an recent Associated Press (AP) article on last year's earnings for FreightCar America, RAIL, along with my thoughts. I am a holder of RAIL and I am puzzled by the markets luke warm reaction to RAIL's exploding earnings.

From a value investors point of view RAIL is a great stock with growing earnings and low p/e, price/book value, price/cash flow, and price/sales ratios. RAIL's drawback is its in a cyclical business and the investing public does not realize how long this replacement cycle will last. I believe much longer then prior replacement cycles. And many on Wall Street have no idea of how to value a RAIL with its lumpy yet unseasonal revenue and earnings stream. Just keep in mind year 2005 earnings were $4 followed by year 2006 earnings of $10 and the stock costs only %52.95. Go figure

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