Actionable news
0
All posts from Actionable news
Actionable news in GBX: THE GREENBRIER COMPANIES Inc,

Trinity: Ignore ValueAct's PR Stunt

Summary

ValueAct divulged a major stake in TRN which caused a surge in the stock.

ValueAct's PR stunt might create value for itself, but shareholders who crowded into the trade might not benefit.

Trinity's Q2 railcar revenue fell 18% Q/Q. It was buttressed by lease fleet sales that could be ethereal.

Q2 industry railcar orders fell 62% Y/Y. This will hit TRN's bottom line by the first half of 2017.

Ignore ValueAct's PR stunt and sell TRN.

Jeffrey Ubben of ValueAct

I have been bearish on the railroad industry and railcar manufacturers for a while now. To my dismay hedge fund manager ValueAct recently disclosed a large equity stake in Trinity (NYSE:TRN) and the stock soared:

Valueact Capital Master Fund LP reports 6.8 pct stake in Trinity Industries Inc as of July 18, 2016 - SEC filing. Valueact Capital Master Fund says intends to have talks with Trinity Industries management and board to "discuss ways to enhance shareholder value."

Enhancing shareholder value could entail cutting costs, selling underperforming divisions or seeking a merger. I doubt ValueAct will spend time on a merger angle given its public defeat...


More