Wednesday, July 2, 2014

GBX: a train that won't slow down

So GBX blew out earnings and put up 12%.
I bought GBX last month at 56 and change.  But sold after the initial breakout failed as I did not want to give my profits back. Had I held my initial stop I would have still been in this trade.  I considered re-entry and and would considered it to have been a good entry point.  After reviewing GBX's recent past quarter earnings I noted a miss and some loss of traction.  As a result, I chose not to re-enter despite my belief that the industry was strong.  Since it was a calculated decision not to re-enter, I'm not that disappointed that I missed the earnings move.

So do  can I learn from missing this move?

GBX tells me however, that the "rails" are strong and the big driver  is because of domestic energy.  Oil is being shipped out and fracking sand is being shipped in.  Similar comments were expressed in UNP's CC which said shipments of Fracking sand was up 22% in Q1.

I have owned HCLP sub $38. It's had a great run despite the pullback today.  During the course, I've owned it it has had several of these significant pull backs. March, April and in June. Today's move in GBX tells me there is more left in the tank. I'll track UNP's earnings as well.  If positive, I would target EMES, SLCA, or HCLP on any significant pull back before earnings reporting as I believe there is substantial likelihood the results will be great.  If the railroads are buying more cars to service the fracking industry, the RR's will be more active as will the drillers.

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