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 Strategies & Market Trends : Value Investing

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To: Ditchdigger who wrote (48334)6/17/2012 11:08:54 AM
From: Paul SeniorRead Replies (1) of 51629
 
Rail leasing/rail manufacturing. I'm guessing GMT (GATX) would fare about like TRN. I picked TRN for my tracking position because it seems more concentrated in rail cars and trades closer to book value. Additionally, I like its relatively low forward p/e. (Of course though, reiterating -- it's always a dangerous thing to do to rely on analysts' estimates.) Also as I scan TRN, it looks to me that TRN has a somewhat lower relative p/sales number now than it has generally had than does GMT to its (GMT's) history. Otoh though, GMT has a somewhat more consistent history (or maybe the word is more persistent history) of increasing its stated bv. Plus GMT pays a much larger dividend (yield) than does TRN. GMT wins again on having a better (higher) roe historically. However, imo each company shows at best a mediocre return on equity on average historically.

I guess I'll conclude -- from the the superficial way in which I'm looking at these two -- one's about the same as the other ---and it could be that neither is attractive enough for a value buy at their current prices (given the companies' decade's sub-par/mediocre roe's). And so if either is bought now for the companies' possible favorable business prospects, maybe it should be for a tracking position only at this time. So I agree with you on position size.
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