Can Trinity Industries Make You Money?

Let’s talk about Trinity Industries (NYSE:TRN).

I discovered this stock a decade ago as a windmill play, but its core business is rail and leasing, along with barges and construction.

I can't explain why the stock got crushed. (There’s a debate between rail companies and government about these new tankers.) I think, though, it gives us a chance to get involved and buy it, because it looks too attractive at these levels to ignore.

Execution is great, beating the Street in each of the last four quarters - including the June quarter that saw earnings come in 31% ahead of estimates. In that quarter, new orders came in at 9,880 cars –that’s a record! And the backlog of 45,300 was yet another record.

Operating margins climbed to 19.7% from 16.2%. Leasing was strong, up 37%, and operating margin up 42%...that’s juicy stuff. From a technical point of view, the stock breaks out through $37. Initially, the next leg has for intermediate-term investors (3 months) $44, longer I think this stock trades north of $50. It’s not a trading vehicle. I like it long-term, but having said that, it is very volatile.

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