Billionaire Carl Icahn Dumps Greenbrier Companies (GBX)

Page 1 of 2

ICAHN CAPITAL LPGreenbrier Companies Inc (NYSE:GBX) announced per a 13D that billionaire Carl Icahn sold off over 65% of his stake, dropping his ownership of the rail car company from 9.9% to 3.4%. The selloff comes after Greenbrier rejected Icahn’s latest offer to pay $22 per share for the company, compared to its $15.60 trading range. Shares fell around 15% last week on the news that Greenbrier rejected the offer (check out Carl Icahn’s newest stock picks).

Icahn had offered to merge American Railcar – which he owns over 50% of – with Greenbrier. Icahn’s previous 13D filing announced an offer to buy Greenbrier for $20 per share, but the activist investor upped it to $22 after his initial bid was declined. Merger talks have been on-and-off for about five years now, with Icahn dropping his last major effort in 2008. Raymond James recently downgraded Greenbrier following the announcement that Icahn had decided to sell off his stake.

As a whole, the railcar industry should bode well in the interim as a rise in coal consumption provides a supportive tailwind. This should help Greenbrier as well, despite Icahn’s exit. Greenbrier trades as one of the cheapest rail stocks in the industry on a P/E (9x) and P/CF (4x) basis. One other positive is the ‘growth at a reasonable price’ opportunity the company’s stock presents. Greenbrier trades at a PEG of 0.7 given its 12.5% 5-year expected earnings growth rate.

Comparing Greenbrier to Icahn’s American Railcar, Greenbrier is much cheaper. Both companies trade with a market cap between $425-$675 million, but American Railcar sports a 1x sales multiple, while Greenbrier is at a mere 0.3x. Greenbrier has a 3.2 beta but is down over 35% year to date. Assuming Greenbrier trades in line with American Railcar on a P/S basis, the stock could triple in value as long run growth stabilizes.

But what about the company’s competitors?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!