Holy Equities Commissioner…We Don't Even Miss the Batmobile!
Michael is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
With the original Batmobile selling at auction recently for $4.2 million, the Caped Crusaders have resorted to public transit and other modes of transportation to fight evil. At an Investors' Forum in Gotham City this week, the Duo discussed their investing philosophies concerning diverse aspects of the transportation industry. Here's a portion of my give and take with them:
Michael: I understand you both have an interest in rail manufacturers in the railroads industry.
Batman: We do. We're thinking of moving out of the Bat Cave to a hip South Beach condo and have a lot of stuff to transport to Florida.
Robin: We like Trinity Industries ), and we especially like their third quarter 2012 numbers. Trinity's rail manufacturing companies offer the most diversified rail industry product line available in North America.
Batman: Yes, well said Robin. Trinity had year-over-year third quarterly revenue growth of 19 percent and earnings per common diluted share growth of 100 percent. They had Rail Group orders for 4,865 new railcars during the quarter. This brings their backlog to 31,330 units - valued at a record level of $3.3 billion.
Robin: They had Rail Group shipments of 4,145 railcars during the third quarter and anticipated full year 2012 shipments of between 19,150 and 19,650 railcars.
Michael: I see they declared a quarterly dividend of 11 cents per share on their $1.00 par value common stock in December 2012.
Batman: That quarterly cash dividend was their 195th consecutively paid dividend. Robin gets very excited with consistent regular dividend payments. I advise investors to investigate corporations with this consistency.
Robin: I was a little disappointed with my overall stock portfolio dividend returns in 2012, however.
Batman: Well, if you'd quit hitting on Batgirl and spend more time studying your portfolio maybe you'd make better investing choices.
Robin: Oh, you think so do you…well…
Michael: Gentlemen gentlemen, let's get back to the issues at hand. So, what should investors take away today concerning Trinity Industries?
Batman: I think investors should also consider the profitability of Trinity's Railcar Leasing and Management Services Group.
Robin: Yes, Trinity Industries Leasing Company is a leading provider in North America of comprehensive rail industry services including railcar leasing, management, and administration.
Batman: Again, well said Boy Wonder. This Group did have operating profit from the sales of railcars from the lease fleet of $21.3 million. This is compared to $6.5 million in the same period the year prior.
Robin: We like Rail in general. Warren Buffett is buying the 77.4 percent of Burlington Northern Santa Fe that he didn't already own, so what does that tell you? Investors should research the reasoning behind big moves such as that.
Michael: Yes. Jim Ambrosio at TickerSpy (tickerspy.com) said on Nov. 9, 2012 that Buffett's, "investing in a core industry that he views as essential to the growth of the American economy. As always, Buffett is looking years down the road, not a couple of quarters."
Batman: Take note Robin…forward thinking…forward thinking. All you investors here today should think the same way. I also like some of what General Electric (NYSE: GE) is into. I like how in August 2012 they rolled out the cleanest and most fuel-efficient freight locomotive since they began making train engines a century ago.
Robin: Yes, the engine is a prototype for a new GE Evolution Series locomotive. It meets the Environmental Protection Agency's (EPA) strict, new "Tier 4" emissions standards. Its good from an array of perspectives – fuel cost savings, its good PR, and shows that the company's constantly innovating.
Michael: What other companies are you considering?
Robin: I'm feeling a little warm and fuzzy about…
Robin: No…Mr. Smart Aleck… US Airways Group ).
They announced January 2013 traffic results. Mainline revenue passenger miles (RPMs) for the month were 4.9 billion, up 4.8 percent versus January 2012. Mainline capacity was 6.0 billion available seat miles (ASMs). This was up 1.8 percent versus January 2012.
Batman: Don't forget, their Mainline passenger load factor was a record 81.1 percent for the month of January. That's up 2.3 points versus January 2012.
Robin: Yes… and aside from numbers, investors should look at this intangible, which produces tangible results. The company reported in February that 10 US Airways employees from Frankfurt, Germany to Tucson, AZ were awarded $10,000 each for providing exceptional service to customers via the company's "Above & Beyond" program.
Batman: Excellent point Robin. An additional 350 employees of US Airways and their wholly owned subsidiary airlines, Piedmont and PSA, also received recognition via the program and received rewards for their service. This customer service commitment by the company can be very rewarding to their shareholders due to increased passenger loads.
Michael: Thank you, gentlemen. So, in closing, what does the future hold for you both concerning equities?
Batman: I'm staying abreast of market opportunities. The Penguin and Riddler can dream up all the schemes they want. In a few years with dividend reinvestment paying off, I'll be maintaining a home in Gotham, the Swiss Alps, and Fiji, while they continue to flounder in the netherworld of the City's sewer system.
Michael: And you, Robin… Robin… excuse me, Robin.
Robin: Oh sorry… Batgirl was texting me…
Fool blogger Michael Ugulini owns shares - long - in General Electric Company (NYSE: GE).