TRN
Trinity Industries Inc
Industrial/Transportation
05/02/2018
Presented
| Date | 04/27/2018 |
| Price | $31.88 |
| Market Cap | $4.90B |
| Ent Value | $7.75B |
| P/E Ratio | 7.18x |
| Book Value | $29.67 |
| Div Yield | 1.63% |
| Shares O/S | 153.70M |
| Ave Daily Vol | 1,794,255 |
| Short Int | N/A |
Current
| Price | $35.21 |
| Market Cap | $2.90B |
| Trinity Industries, Inc. engages in the provision of products and services to the energy, transportation, chemical, and construction sectors. It operates through the following segments: Rail Group, Construction Products Group, Inland Barge Group, Energy Equipment Group, Railcar Leasing and Management Services Group, and All Other. The Rail Group segment involves in the manufacture and sale of railcars and related parts, components, and maintenance services. The Construction Products Group segment includes manufacture and sale of highway products and trench shields and shoring products and services for infrastructure-related projects; and production and sale of construction aggregates. The Inland Barge Group segment offers manufacturing and selling barges and related products for inland waterway services. The Energy Equipment Group segment comprises manufacture and sale of products for energy-related businesses such as structural wind towers, steel utility structures for electricity transmission and distribution, storage and distribution containers, and tank heads for pressure and non-pressure vessels. The Railcar Leasing and Management Services Group segment owns and manages a fleet of railcars and provides third-party fleet leasing, management, maintenance, and administrative services. The All Other segment consists of captive insurance and transportation companies; legal, environmental, and maintenance costs associated with non-operating facilities; and other peripheral businesses. The company was founded in 1933 and is headquartered in Dallas, TX. |
Companies with publicly traded securities mentioned herein: CSX Corporation (CSX), GATX Corporation (GATX), Trinity Industries Inc (TRN)
Highlights
The presenter likes the risk/reward setup for a long position in Trinity Industries (TRN) with the stock trading in the low $30s; ahead of the planned spin-off of its Infrastructure business. He sees minimal downside risk associated with the Harman vs. TRN guardrail/false claims case, and recent data points show that the industry could be on the verge of a cyclical upswing. At the same time, the balance sheet is overcapitalized and guidance appears to be conservative, so there should be optionality around capital deployment and “beats and raises” over coming quarters, respectively. Using conservative multiples on his 2019 EBITDA estimates for the sum-of-the-parts (SOTP) model yields a $53/share fair value.
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