Are Tank Car Stocks Breaking Out or Breaking Bad?

Are Tank Car Stocks Breaking Out or Breaking Bad?

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What do Walter White and tank car stocks have in common? An interest in hazardous materials, perhaps. 

AMC Networks (AMCX) – and its shareholders – have plenty to smile about after the thrilling finale to Breaking Bad on Sunday.

Read more from Kapitall about Breaking Bad: AMC: Everybody’s Watching

If you're like me and have been addicted to AMC's Breaking Bad (pun intended), the show may have been the first time you paid any attention to tank cars. No, not this. I'm talking about this. Rail tank cars are actually rather common in the US, and they're not just used for transporting methylamine.

Tank cars also deliver crude oil extracted across the US, including the oil produced from hydraulic fracturing – fracking. So you could say rail tank cars are one of the reasons why US domestic energy production is up 14% compared to 2005. 

US railroads transported 108,605 carloads of crude in the quarter ended June 30, a record for crude rail shipments in a single quarter.

But also this year there have been some justifiably heightened concerns around the safety of transporting hazardous materials, like crude oil, via tank car. And considering that tank cars can implode like this, additional safety measures may not be too much to ask. 

But with the shale oil and gas boom steamrolling ahead, tank car stocks, and the railroads that utilize their products, may see further growth. 

Earlier this year we compiled a list of tank car manufacturers that looked poised to benefit from increasing transportation of crude by rail. We decided to re-examine these stocks, as well as some rail companies, to see how they've performed so far this year. 

Click on the interactive charts below to see data over time. 

Below are the five tank car manufacturers we profiled at the beginning of the year, sorted in order of highest performance in the year to date. Use the list as a starting point for your own analysis. 

1. Greenbrier Companies (GBX, Earnings, Analysts, Financials): Engages in the design, manufacture, and marketing of railroad freight car equipment in North America and Europe. Market cap at $659.35M, most recent closing price at $24.77.

Performance year to date: 53.18%
 

 

2. Westinghouse Air Brake Technologies Corporation (WAB, Earnings, Analysts, Financials): Provides technology-based equipment and services for the rail industry worldwide. Market cap at $6.B, most recent closing price at $62.62.

Performance year to date: 43.3%
 

 

3. Trinity Industries Inc. (TRN, Earnings, Analysts, Financials): Provides products and services to the industrial, energy, transportation, and construction sectors. Market cap at $3.49B, most recent closing price at $45.36.

Performance year to date: 27.81%
 

 

4. American Railcar Industries, Inc. (ARII, Earnings, Analysts, Financials): Designs, manufactures, and markets hopper and tank railcars in North America. Market cap at $826.11M, most recent closing price at $38.69.

Performance year to date: 24.41%
 

 

5. FreightCar America Inc. (RAIL, Earnings, Analysts, Financials): Manufactures, rebuilds, repairs, sells, and leases freight cars used for hauling coal, other bulk commodities, primarily in North America. Market cap at $252.17M, most recent closing price at $21.10.

Performance year to date: -5.34%
 

And below are four major rail stocks, sorted in order of highest performance in the year to date. Use the list as a starting point for your own analysis. 

6. CSX Corp. (CSX, Earnings, Analysts, Financials): Provides rail-based transportation services. Market cap at $26.55B, most recent closing price at $25.98.

Performance year to date: 33.3%
 

 

7. Norfolk Southern Corp. (NSC, Earnings, Analysts, Financials): Engages in the rail transportation of raw materials, intermediate products, and finished goods primarily in the United States. Market cap at $24.59B, most recent closing price at $78.30.

Performance year to date: 29.27%
 

 

8. Union Pacific Corporation (UNP, Earnings, Analysts, Financials): Provides rail transportation services in North America. Market cap at $73.49B, most recent closing price at $157.95.

Performance year to date: 27.5%
 

 

9. Canadian National Railway Company (CNI, Earnings, Analysts, Financials): Engages in the rail and related transportation business in North America. Market cap at $42.71B, most recent closing price at $100.94.

Performance year to date: 11.82%
 

 

(List compiled by Emily Smykal. Analyst ratings and returns data sourced from Zacks Investment Research, all other data sourced from Finviz.)

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5 Responses to “Are Tank Car Stocks Breaking Out or Breaking Bad?”

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  4. Hazmat Drums says:

    Good article and investing idea! There's increasing pressure from the DOT to make sure these tank cars are safe. Particularly after all the destruction caused by the explosions in North Dakota and Canada that injured so many people. It'd be a good idea to find a business that strictly follows and meets the regulations set forth by the DOT.

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