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Gold/Mining/Energy : Shale Natural Gas, Oil and NGLs and ESA -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (5194)	2/5/2011 7:19:38 PM
From: E_K_S	Respond to of 6160

Re: GATX Corp. (GMT) Website: gatx.com A pretty good fit in their lines of business. They have way too much debt for the net income they report. That could be due to all the fixed asset equipment they own that is leased (eg. rail cars, industrial equipment etc). PE is still quite high with a forward PE at 15. However, they continue to show pretty good earnings growth YOY around 25%. What pops out for me more than their rail car business is their natural gas compression & leasing business. From their Web site: "...GATX leases natural gas compression equipment, which is critical to the extraction, gathering and transportation of natural gas...." gatx.com The company has excellent gross margins around 53% (vs Industry 46%) but some of their other profitability metrics ROE (7%), ROA (3,27%) and profit margin (7%) do not impress me. With such a high gross margin, I would expect their profit margin to be higher. ------------------------------------------------------------------------ Lots of capital is being deployed to build out the infrastructure of all of these new wells both for oil & NG. Any company that can maintain gross margins over 50% should do quite well especially if they can structure deals w/ a lease to own model. This would require less upfront capital for the well owner/developer.. My other pick Chicago Bridge & Iron Company N.V. (CBI) ( finance.yahoo.com )primarily builds the storage tanks and fixed processing facilities. Notice they have much lower gross margins (around 14%) but much better ROE numbers (over 20%) and little to no long term debt. ----------------------------------------------------------------- Good find on GMT. I have added it on my watch list. EKS