Freightcar America Inc (NASDAQ:RAIL)
Yesterday, FreightCar America, Inc. a North American railcar company, reported their third quarter 2016 financial results. FreightCar reported third quarter earnings of less than a $0.01 per share. FreightCar reported third quarter revenues of $113.5 million.
FreightCar America, Inc. CEO’s Comments
Joe McNeely, President and Chief Executive Officer said,
We are focused on making continued improvements in our production processes and reducing our overhead costs. We are encouraged with the progress of the production improvements initiated in the third quarter and their contribution to the bottom line improvement from last quarter,...We remain on track with our cost reduction efforts, which we continue to believe will improve pre-tax operating results by $5 million when fully implemented by the middle of next year.
Looking forward, we now expect to deliver between 5,400 and 5,700 railcars for the full year 2016. We anticipate that deliveries in 2017 will include deliveries of a significant portion of the existing backlog along with certain new car orders, which cannot be estimated at this point given the softness in the market demonstrated by the recent ARCI statistics for new railcar orders.
RAIL Technical Analysis
RAIL opened trading yesterday at $12.98, which was down from the previous day’s trading close of $12.99. RAIL closed trading yesterday at $13.06 and crashed down after market to $12.10, equivalent to a 7% decrease from the closing price. Taking a look at the daily chart, we can see that we are in unchartered territory as RAIL is currently trading at all time lows. Taking a closer look at the daily chart we can see that before the spike down RAIL had been in an overall downward trend dating back to November 20th, 2015 when it traded at $24.95.
RAIL has a float of 11.48 million shares and traded below the normal daily trading volume on Monday. For trading purposes, I would like to see RAIL open trading on Tuesday below $12.40 and if it does, I would be looking to take a short position at the bell. My stop loss would be $0.20 from my entry position fearing anything more than that and the stock would start to fill in the gap down.
Company Profile
FreightCar America, Inc., through its subsidiaries, designs, manufactures, and sells railcars for the transportation of bulk commodities and containerized freight products primarily in North America. It offers a range of freight cars, including covered hoppers, open top hoppers, gondolas, and intermodal and non-intermodal flat cars that transport various types of dry bulk and containerized freight products.
The company also provides aluminum-bodied railcars that include coal cars; and mill gondola, coil steel, and boxcars. In addition, it leases freight cars; refurbishes and rebuilds railcars; and sells forged, cast, and fabricated parts for various railcars. The company also exports its manufactured railcars to Latin America and the Middle East. Its primary customers include railroads, shippers, and financial institutions. The company was founded in 1901 and is headquartered in Chicago, Illinois.