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Payne's Picks

Good Time to Get into ARII?

By Payne's PicksFOXBusiness

American Railcar a ‘buy’?

FBN’s Charles Payne, A&G Capital CIO Hilary Kramer, NewOak Capital President James Frischling, retail analyst Hitha Herzog and Penn Financial Group founder Matt McCall debate the outlook for American Railcar Industries.

I got another stock pick that's beaten down for you -- American Rail Industries (NASDAQ:ARII).

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I've talked about this stock a lot. I've made money in it most of the time. I did get whacked in it once.

Here's the thing. The last time they reported, the quarter was bad. Externally, their manufacturing business, which is a bulk of their business, was down 25%. Now internally, they build and sell themselves a lot of cars they lease out later – it didn't fool Wall Street. The stock got absolutely decimated.

However, the mix was bad too. They had these hybrid cars -- the average selling price was much less than tankers. But we do know Keystone is not going to be built for a long time. We do know that even though oil is cheap, that business will probably come back. In the meantime, we've seen some signs from some of these rail companies that other parts of the economy may pick up the slack. I think it's oversold.

I love the recent action on it. Breaks out to $55, that’s the 50-day moving average exponentially. I think by the end of this year, this could be a $65 stock. So far, it's not for the faint of heart. I like it for traders and long-term investors.DISCLOSURES

What do you think?

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