TAKING STOCK: Trinity Industries

Dear Mr. Berko: I have $120,000 to invest. Our new broker has recommended nine different stocks (list enclosed), and the only stock I never heard of is Trinity Industries Inc. What do you know about it, and what is your opinion? This broker says he knows you. --EP, Boca Raton, Fla. Dear EP: More folks know the name Johnny Stompanato than know Trinity Industries (TRN-$72), a quiet $4.6 billion-revenue company with 14,000 employees. Trinity Steel (founded in 1933) made butane tanks in a Dallas mule barn, grew a little bit and then came public in 1958. I was first asked about TRN in 2002, when it was $11 a share, and because I thought the company was underwhelming, I told the reader not to buy 500 shares. Instead, I recommended Amgen at $60. Darn! It's so difficult to find a good broker who is willing to spend time with smaller accounts and who will also actively manage a portfolio of common stocks. Most brokers will eagerly dust you off and recommend high-commission mutual funds or annuities. I sat next to your broker at a Florida Panthers hockey game in Fort Lauderdale years ago, and he's fine as Finch. The eight other issues he recommended are excellent long-term selections, and his Trinity recommendation is a supercalifragilistic investment. So if you believe, as I do, that the European economy is traveling the road to recovery, that both that economy and our economy will continue to grow and that exports and imports will continue to improve, then an investment in TRN is spot on. Its rail car, inland barge, construction and energy equipment businesses will uncommonly benefit from these improving economies. TRN's Trinity North American Freight Car Inc. produces a full line of freight cars that transport coal, grains, plastics, cement, sand for hydraulic fracturing, autos and steel products. It also manufactures pressurized and non-pressurized tank cars that move crude oil, vegetable oils, renewable fuels, corn syrup, natural gas, specialty chemicals and nuclear fuels. All of those products have increasing worldwide demand. Trinity's Railcar Leasing and Management Services Group provides leasing and management services that permit customers to focus on their core businesses. This includes full-service and per diem leases on new and specialized TRN-manufactured cars from its huge fleet. Management services include regulatory compliance, inventory management, maintenance and repair. Trinity's Inland Barge Group makes hopper barges and tank barges -- 280-ton, 200-foot behemoths that travel the waterways of the U.S. and reach destinations, in most instances, faster, more cheaply and more efficiently than trucks, pipelines and trains. These barges transport petroleum, chemicals, fertilizers, ethanol, liquid cargoes, grain, coal, construction aggregates and a variety of other products in high demand because of our booming energy business. Trinity's Energy Equipment Group manufacturers infrastructure-related products -- e.g., pressurized and non-pressurized containers that store propane, anhydrous ammonia and various liquids related to oil and gas exploration and production. This group is also a leading producer of wind towers and provides logistical support and maintenance for wind tower farms. Trinity's Construction Products Group makes end terminals, highway guardrails and crash cushions. It is also a leading distributor of aggregates and owns surface mines in Texas, Arkansas and Louisiana, producing sand, gravel and limestone base. It's also an important producer and distributor of lightweight aggregates made from shale and clay. The group also provides trench shoring equipment for the construction industry and manufactures structural supports for drilling platforms, highway bridges and commercial and high-rise buildings. The new World Trade Center, Pennzoil Place and several important Moscow buildings are firmly anchored by TRN products. That's a snapshot of TRN, which at this time last year was just a $35 stock. The energy boom has years to play out, and the slow but steady pickup in the U.S. and European economies is probably a given. Earnings for 2014 should come in at $5, so TRN is trading at a price-earnings ratio of 14-to-1. Considering TRN's potential growth, the stock deserves a P/E of 16- or 17-to-1. So if earnings reach $7.50 by 2017, TRN could be a $120 stock, or it may split 2-for-1. ---------- Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. Visit Creators Syndicate website at www.creators.com. © 2014 Creators Syndicate Inc. Published: Mon, Mar 10, 2014