American Railcar was founded and incorporated in Missouri in 1988 and has grown from being a small provider of railcar components and maintenance services to one of North America’s leading integrated providers of railcars, railcar components, railcar maintenance services and fleet management services.
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Revenues has grown strongly in recent years as companies increasingly transport grain, potash, oil and other products by railroad. The company recently announced another strong quarter of earnings powered by the strong tank railcar market. During the second quarter of 2013, American Railcar shipped approximately 1,310 railcars and reported a backlog of approximately 6,940 railcars including approximately 2,620 railcars for lease customers. Rail car leasing revenues increased by $4.9 million increasing volumes at firm prices and railcar services revenues increased $2.8 million.
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Consensus forecasts on Yahoo Finance point to strong earnings growth averaging 15% over the next five years. American Railcar should continue to benefit from a recovering economy as companies ship everything from coal to cars and freight containers packed with imported goods. Priced on 9.8 times historic earnings many investors may choose to climb aboard.
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Disclosure: The author holds no positions in the above mentioned stocks