FreightCar America, Inc. (RAIL) Stock: Why It’s Declining In Value


FreightCar America, Inc. (RAIL) is headed down in the market today. The company, one that is focused in the service sector, is currently priced at $6.41 after heading down -7.10% so far today. As it relates to service stocks, there are a number of factors that have the potential to cause declines in the market. News tends to be one of the biggest reasons for the movement. Here are the most recent stories relating to RAIL:

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Mar-12-19 11:29AM Easy Come, Easy Go: How FreightCar America (NASDAQ:RAIL) Shareholders Got Unlucky And Saw 71% Of Their Cash Evaporate
Mar-04-19 05:48PM FreightCar America Inc (RAIL) Files 10-K for the Fiscal Year Ended on December 31, 2018
05:57AM Edited Transcript of RAIL earnings conference call or presentation 27-Feb-19 4:00pm GMT
Feb-26-19 08:17PM FreightCar America, Inc. Reports Fourth Quarter and Full Year 2018 Results
Feb-12-19 06:45PM FreightCar America, Inc. Announces Date for Fourth Quarter 2018 Earnings Conference Call

However, any time investors are making a decision to invest, prospective investors should focus on far more than news, this is especially the case in the ever complex service space. Here’s what’s going on with FreightCar America, Inc..

Recent Trends From RAIL

While a move toward the top in a single session, like the move that we’re seeing from FreightCar America, Inc. may make some investors upset, a single session fall by itself should not be the basis of a decision to, or not to, invest in a stock. It is always a good idea to look at trends experienced by the stock further out than a single trading day. As it relates to RAIL, below are the returns on investment that investors have seen:

  • Past 5 Trading Sessions – In the last 5 trading sessions, RAIL has seen a price change that amounts to -10.35%.
  • Monthly – The ROI from FreightCar America, Inc. throughout the last 30 days comes to -22.77%.
  • Past Quarter – Over the past three months, the stock has generated a return on investment of -6.42%
  • Bi-Annually – Over the last 6 months, investors have seen a change that works out to -60.58% from the stock.
  • Year To Date – Since the the first trading session of this year RAIL has produced a return of -4.19%.
  • Full Year – Finally, throughout the last year, we’ve seen movement that comes to -53.11% out of RAIL. Over this period, the stock has sold at a high of -68.17% and a low price of -1.16%.

Ratios Worth Paying Attention To

Looking at various ratios associated with a company generally gives prospective traders a view of how dangerous and/or rewarding a an investment option may be. Here are a few of the most important ratios to look at when looking at RAIL.

Short Ratio – The short ratio is a measure of short interest. As the short ratio goes higher, it shows that more investors have a belief that the stock is headed for declines. Across the sector, strong service sector stocks can carry a lower short ratio. On the other hand, we also tend to see a lot of short squeezes in the space. Nonetheless, with regard to FreightCar America, Inc., the stock’s short ratio clocks in at 6.78.

Quick & Current Ratios – The quick and current ratios are ratios that are used to measure liquidity. Basically, they measure If a company is able to pay its debts when they come due using current assets or quick assets. come with great current and quick ratios. As far as RAIL, the quick and current ratios add up to 1.50 and 2.50 respectively.  

Book To Share Value – The book to share value ratio compares the the price of shares to the book value of assets that are owned by the company. when it comes to FreightCar America, Inc., that ratio is 15.71.

Cash To Share Value – The cash to share value ratio compares the amount of cash the company has on hand to the value of the company’s stock. In terms of RAIL, the cash to share value is 5.06.

Show Me The Big Money

One thing I’ve come to understand in my brief period on Earth has been that good investors tend to follow big money. Usually, investors that are trying to keep the risk down will follow moves made by institutions as well as those on the inside. With that said, is big money flowing as it relates to RAIL? Here’s what’s happening:

  • Institutional Investors – As it stands now, institutional investors hold 87.90% of FreightCar America, Inc.. Nonetheless, it is worth mentioning that the ownership held by institutions has seen a move of -1.14% over the past quarter.
  • Investors On The Inside – with regard to insiders, insiders of the company currently own 1.70% of the company. Insider ownership of the company has seen a move of 4.70% in the last 3 months.

What Analysts Say About FreightCar America, Inc.

Although it’s rarely a good idea to avoid doing your DD and blindly following the thoughts of analysts, it is a smart idea to use their opinions in order to validate your own due diligence before making investment decisions in the service space. Below you’ll find the recent moves that we’ve seen from analysts as it relates to RAIL.

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Nov-01-18 Downgrade CL King Buy → Neutral
Aug-03-18 Reiterated Stifel Hold $15 → $19
May-07-18 Reiterated Stifel Hold $14 → $15
Nov-07-17 Reiterated Stifel Hold $15 → $14
Jun-21-17 Initiated Buckingham Research Neutral $17

Financial Performance

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $-0.26. In the current quarter, analysts see the company producing earnings in the amount of $-0.55. Over the last 5 years, RAIL has generated revenue in the amount of $1.70% with earnings coming in at -15.30%. On a quarter over quarter basis, earnings have seen movement of -196.40% and revenue has seen movement of 10.90%.

Float Information

Traders tend to have an interest in the total numbers of shares both outstanding and available. In terms of FreightCar America, Inc., there are currently 12.46M and there is a float of 11.88M. These data mean that out of the total of 12.46M shares of RAIL that are out there today, 11.88M are available to trade hands in the public space.

I also like to look at the short float. After all, if a large portion of the float available for trading is shorted, the overall opinion among traders is that the stock is headed for a steep decline. In regard to RAIL, the percentage of the float that is currently being sold short is 6.46%. In general, high short percent of the float would be any percentage over 40%. In my research, I have calculated that a short ratio over 26% is usually a risky play.

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