Nice write up, Ray. Thanks for sharing.
Just one comment…
ROE (ttm) 23.08% 35.90% 20.70%
Maybe I missed it in the write up, but if not, I think ROIC is a better comparison than ROE for these companies. ROE can be misleading when there is debt.
I did a quick and dirty based on most recent fiscal year end (August for GBX)…took an average of two years for balance sheet items, ignored operating leases for now, and adjusted for one-time items for GBX and TRN.
TRN ROIC = 12.8%
GBX ROIC = 14.5%
WAB ROIC = 16.7%
Also did a back of the envelope weighted cost of capital:
TRN = 5.9%
GBX = 5.6%
WAB = 6.9%
Higher for WAB because equity costs more than debt and its financing is 78% equity.
The numbers are likely wrong because I did this real fast. Just wanted to throw out the idea of using ROIC instead of ROE here.
Thanks again,
Ears