Rail Cars And The Bakken; Barron's Posts A Warning

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A reader caught this story in Barron's over the weekend: railcar maker may have overbuilt. This is a long two-pager article; well worth the read.

As oil gushes from North Dakota and Western Canada, far away from most pipelines and refineries, railroads are carrying record volumes of crude in trains a hundred tank cars long. One of the best investment plays on this rising crude-by-rail traffic has been the shares of railcar manufacturers, whose backlog on tank-car orders happily stretches out to 2015. In the four years since the recession's bottom, the stocks of Trinity Industries, American Railcar Industries, and Greenbrier Cos. have more than tripled, outpacing the S&P 500's 60% gain. The tank-car upturn attests once more to the smarts of guys like Warren Buffett, whose Berkshire Hathaway owns industry leader Union Tank Car, and Carl Icahn, whose Icahn Enterprises controls American Railcar.

But the railcar makers may have become too successful for their own good.

I did not know both Warren and Carl owned/controlled two railcar makers. the Keystone XL story gets curiouser and curiouser. [Wow, I love to blog/connect the dots. A big "thank you" to the reader for alerting me to this Barron's story.]

It should be noted that RBN Energy has had many stories related to rail cars and CBR. And, of course, I mentioned that the most recent issue of BloombergBusinessweek had a short article on CBR and Warren Buffett.