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Strategies & Market Trends : Value Investing
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To: Technamentals who wrote (57918)9/6/2016 12:05:54 PM
From: Graham Osborn1 Recommendation

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E_K_S

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Welcome Technamentals! First off, thank you for posting your actual valuation, which is infinitely more useful than "I bought X today because the earnings report missed consensus and the P/ B was low."

On methodology, you will find few here who will very much weight a DCF for a cyclical - particularly with a CAGR assumption. That is why your PT from this method comes out high.

On the stock: I did look at RAIL when running a comps for GBX. It does indeed appear cheap. I picked GBX over RAIL because it had a multi year TR of revenue and tangible book growth, whereas RAIL (which was comparably cheap on most spot/ TTM metrics) has gone nowhere over the past decade. Will GBX continue growing? Probably not, although I think the probability is nonzero. Second, RAIL is still in a bit of a death slide whereas GBX at least appears to show consolidation.

Hope that helps,
Graham
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