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41.88 (1y: +66%)
Market Cap 3.27 B P/E(ttm) 11.80
Enterprise Value 5.83 B P/B 1.60
TRN- NYSE (USA)
Trinity Industries, Inc.
  • Currently 1/5
Business Predictability Rank: 1-Star
Back Testing Results:
Average gain of all 1-Star stocks: 1.1% per year.
% of Stocks that are in still loss if held for 10yrs: 45%.
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Trinity Industries, Inc. Inventory: 718.9 ( as of Mar13)

* All numbers are in millions except for per share data TRN 10-Y Financials »

Definition

Inventory includes the raw materials, work-in-process goods and completely finished goods of a company. It is a portion of a company’s current assets.

Explanation

Inventory control is an important part of business operation. If a company does not have enough inventory, it may not be able to meet customers’ required delivery time. If it has too much inventory, the cost of holding the inventory can be high.

In Ben Graham’s calculation of liquidation value, inventory is only considered worth half of its book value:

Liquidation Value = Cash and short-term investments + (0.75 * accounts receivable) + (0.5 * inventory) - total liabilities

Inventory can be measured by Days Sales of Inventory (DSI):

Days Sales of Inventory (DSI) = Inventory /Revenue * Days in Period.

Beaware

Manufacturers with durable competitive advantages have the advantage that the products they sell do not change, and therefore will never become obsolete. Buffett likes this advantage.

When identifying manufacturers with durable competitive advantage, look for inventory and net earnings that rise correspondingly. This indicates that the company is finding profitable ways to increase sales which called for an increase in inventory.

Manufacturers with inventories that spike up and down are indicative of competitive industries subject to boom and bust.

Related Terms

Total Current Assets
* All numbers are in millions except for per share data

Trinity Industries, Inc. Annual Data

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Trinity Industries, Inc. Quarterly Data

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