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. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

The 10 Biggest Tax Havens in the World to Stash Your Money

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!