3 Little-Known Stocks From 2013’s Most Promising Sector

3. Trinity Industries, Inc. (NYSE:TRN)
As was the case with Triumph Group and URS Corp., Trinity Industries, has more than one business line. However, its ventures can be narrowed down to two basic industries: Transportation and infrastructure engineering. It makes everything from railroad cars and barges, to highway guardrails and wind-turbine towers. None of it is riveting, but all of it is necessary.

Also like URS and Triumph, Trinity Industries has a fundamental pedigree that makes it buy-worthy: The forward-looking P/E is a mere 9, and earnings are forecast to grow more than 16% next year. Trinity fell short of revenue as well as earnings estimates last quarter, but sales were still up 18% compared with last year, and per-share earnings were higher by 90%. As for the catalyst that really could jolt Trinityshares out of what’s now almost a two-year slump, don’t worry — it’s likely on the way.

Although rail cars deliveries are expected to fall 15% in 2013 compared with 2012’s levels, by 2014, sales of railroad cars are expected to exceed 2012’s total by more than 22%. Simultaneously, if the United States is going to recover at all, this rebound is going to have to materialize in 2013. Those converging trends will put all of Trinity’s businesses into high gear.

Risks to Consider: As strong as any industry or corporation can be, no company is completely immune to setbacks. The primary risk these three stocks face is the same most other companies face: A broad economic slowdown.

Action to Take –> Generally speaking, one stock from a single sector/market-cap group would be enough to fill a hole in a portfolio, while two stocks from that group would be overkill. In this particular case though, these three stocks are different enough from one another that owning a piece of all three wouldn’t be redundant.

Investors who only have room for one new pick, however, should consider Triumph Group first. It’s proven the most consistent of the three and is highly diversified. Shareholders willing to sit tight for at least a year could realistically find themselves up 30%, if not more, by this time in 2013.

This article was originally written by James Brumley, and posted on Streetauthority.