Genesee & Wyoming, Inc. (NYSE:GWR)

CAPS Rating: 4 out of 5

An owner and operator of short line and regional freight railroads in the United States, Australia, Canada, and Mexico. The Company also provides freight car switching and rail-related services to industrial companies in the United States and Australia.

Recs

5
Player Avatar MikeMiloserdoff (< 20) Submitted: 11/30/2006 2:12:13 AM : Outperform Start Price: $26.55 GWR Score: +93.13

Whenever I am on the highway (primarily I-40), and see three locomotives up-front, on the adjacent train tracks pulling a (mile-long) string of piggyback truck trailers on flat-bed rail cars , I think of the economies of scale that seem to be inherent in rail transportation, in certain circumstances. With the price of fuel probably not getting less expensive in the long-term, rail transportation appears fairly efficient. Anything such as a train with a lot of rail cars, that takes a mile or so to come to a complete stop must be pretty frictionless (efficient transfer of power) in its travel (steel wheels rotating on steel tracks), once it gets going.

I like mid-cap companies like GWR, because they are usually out of the shakeout phase of their industry's growth, and they usually have more long-term room to grow. Personally, I like transportation industry stocks, because they are much less volatile and speculative than other industry stocks (such as pharmaceutical stocks, when Prozac became generic, the maker of Prozac lost 1/3 rd off of the price of their stock in one day, if I remember right...), and the stock prices seem to be based more on "intrinsic" value AKA fair market value (or lower), than on "emotional" value, AKA Google, AKA Krispy Kreme.

GWR stock seemed to be a good stock at the time for me, given the industry, the market capitalization, the price-earnings ratio, and the company's phase in their life-cycle. "Try before you buy", watch it for a few months or so, if you are in for the long-tem, a few month's wait-time shouldn't effect a long-term decision at all.

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