TRN - Holding Trinity Industries Inc.

2024-06-27 10:24:20 ET

Summary

• Trinity Industries Inc. shares have returned 47% since last October, outperforming the S&P 500.
• Financial performance has been strong, with revenue up 26% and net income up 438% compared to last year, but the capital structure has deteriorated. 2025 may be a challenging year.
• At the moment, the shares offer much more risk for approximately identical reward compared to the 10 Year Treasury Note.

In late October of last year, I plugged my nose, and bought back into Trinity Industries Inc. ( TRN ), and since then the shares have returned about 47% against a gain of 32% for the S&P 500. One of my more odious qualities is my tendency to brag, and so I’ll warn you now that there may be some of that in this article. For people who are justifiably repelled by such behaviour, I would stick to the “thesis statement” paragraph below. From my perspective, I get so few wins that I feel a strong need to shout loudly about the ones I do get. Anyway, the company has posted financials since, so I thought I’d review the name to see if it makes sense to add to the position, hold, or take profits and run. I’ll make this determination, as usual by reviewing the financials and by comparing to alternatives available to us. In my last article, I compared the company favourably to the 10 Year Treasury Note, and noted that the shares were trading on the cheap side of their range. In this piece I want to examine the extent to which that condition persists....

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