What the Analysts Say
The comments below are excerpted from published stock analyst reports on stocks of local interest. This information should not be used as the primary basis of investment decisions. Stock analysts and brokerage firms may own or actively trade stocks of the companies that they review and recommend. Brokerages also may participate in public stock offerings for those companies.</br></br>Analysts routinely caution that while their information is based on sources they believe to be reliable, they cannot guarantee the accuracy of their information. Nor, they say, can they promise that their recommendations will be profitable.</br></br>"Brenco Inc., based in Midlothian, Va., manufactures tapered roller bearings and component parts for railroad cars. Customers include most major railroad operators, wheel shops and rail car builders in the United States, Canada, India and Mexico. The company also manufactures forged components principally for the major U.S. automakers. Its wholly-owned Rail Link Inc. subsidiary provides thirdparty contract switching services to large industrial rail users.</br></br>"We think the shares of Brenco represent a good value. Based on a favorable, fairly `locked-in' outlook through 1996, we think the shares are undervalued. Beyond that, potential from new products adds upside possibilities. The market does not appear to recognize either the value of the core rail car business or the potential from the automotive products side of the house. "Brenco is lesser known in the stock market than its main competitor, Timken Co., or its major original equipment manufacturer customers, such as Trinity Industries. This creates a good investment opportunity. . . . "The rail car business is on the rebound. In 1994 the industry shipped more than 53,000 units, up almost 50 percent from 1993. The industry backlog at the end of the year stood at about 44,000 cars. The American Railway Car Institute expects shipments of 60,000 units for 1995, the biggest level of activity since 1980.</br></br>"Domestic rails have been on a productivity hunt for the past several years, including better asset utilization, and as a result have become more competitive with trucks for freight shipments. Market share stopped eroding and, in some instances, improved.