Value Investing News

This is a report on a railcar manufacturing/leasing business that I believe is undervalued for a number of reasons described in detail. The leasing business is effectively a call option on railcars, and the company should provide a nice return to investors even if very pessimistic scenarios unfold.

The hate e-mail can stop!! This blog has been investing real money in the magic formula for over 2 years. 2007's results and results since inception are now posted!

Some information regarding freight car demand.

Analysis on the OVER-valuation of FreightCar America.

Alex is a bright young man (16yo) and has some interesting thoughts on investing in RAIL.

RAIL is definately worth a close look. Monish Pabrai has built a position in the last several months as well as many other famous traders.

RAIL is showing up on many value screens these days. Here's a story about the future of one of their facilities.

Excerpt: "Every one of the companies in his [Monish Pabrai] portfolio seems to have two qualities: deep value (as measured by a low multiple over assets or earnings) and a slight taint of scandal or uncertainty."

How could I not link to this article? I have a position in everyone of these companies.

I reviewed Mohinsh Pabrai's portfolio.

I'm not sure if Cohen deserves to be listed under a superivestor in the way I like to use the term; however, he is running ~$12 Billion and his funds have been around for 15 years. Anyway he is accumulating a large stake in RAIL the largest railcar maker in the U.S.. RAIL certainly seems undervalued to me and has been a Magic Formula pick for the better part of a year.

Disclosure: I am long RA

Mohnish Pabrai bought more Delta Financial Corp., Harvest Natural Resources Inc., Cryptologic Inc., FreightCar America Inc., and Berkshire Hathaway. He sold half of his position in MDC Holdings Inc., half of Star Gas Partners LP, most of remaining Universal Stainless Alloy, and a good chunk of Lear.

Alex Shadunsky feels that RAIL's valuation isn't attractive enough to overcome the slowing economy and cyclical nature of the rail industry.

Excerpt: "FreightCar America (NASDAQ: RAIL - News) is what Joel Greenblatt would call a “Magic Formula Stock” (from his popular The Little Book that Beats the Market), which is currently in the top 30 ranks in terms of high EBIT/EV (return on capital), coupled with high EBIT/Price (earnings yield). With a PE around 6, a nil chance of bankruptcy, and solid growth over the past few years, there is no doubt the company’s numbers look attractive and a possible buying opportunity exists."

Commentary on buying or selling Magic Formula Stocks on 20% drops in stock price.

Commentary on mistakes made and lessons learned after investing for one year in Joel Greenblatt's Magic Formula, as detailed in "The Little Book that Beats the Market."