Sunday, August 3, 2014

"Looking for Buried Treasure? Sometimes you need only to look in your own backyard, (my backyard is in Pennsylvania), and look under the Big "W".

Dow Jones Industrial Average 16493.37,  (Way, Way Down) Week ending 08-01-2014

Famous treasure hunters from the "Mad World" movie
Looking for buried treasure? We all want to own stocks in Copper mines in Indonesia or an oil stock company in the Athabasca Tar Sands in Alberta, Canada or some place far away. It seems like these would be the exotic places where great fortunes could be made suddenly and shuttled away safely to the bank. But sometimes all you need to do is look in your own backyard to find your treasure.

In the movie, "It's a Mad, Mad, Mad, Mad World", (Vintage 1963),  the mystery buried treasure was buried under a big "W", ($330,000 dollars),  but nobody knew where it was located.

My backyard is in Pennsylvania. So I  looked underneath the Big "W" out there in Wilmerding, PA., in Western Pennsylvania, for an old company that long represents that W symbol, and a company that was organized back in 1869 called "Westinghouse". 

Specifically the daughter company , WABTEC (Symbol WAB, $80.86) , otherwise known as Westinghouse Air Brake Technologies Corp. 

I first heard about this company from a radio business show trivia quiz. "What company's stock has been up 14 out of the last 15 years"? The answer: WABTEC (WAB). 

WABTEC is a major player in the global rail industry. It has a 50% market share in its primary braking related equipment and is a leader in most of its other product categories.

WABTEC has a Return on Equity of 20.32 and a PEG ratio of 1.534. The current PE is 24.78.

Revenues for the company yearly are $2.739 Billion dollars and they generate Free cash flow of $99.42 Million dollars per quarter. The Current ratio of the company is 2.3 to 1.

The company has an amazing 5 year stock chart and pays a small dividend of 6 cents a share.

Earnings for 2013 were $3.05 per share and 2014 is looking like $3.54 per share. The projection for 2015 is $4.08 per share, (a forward PE of 20.46). 
Analysts on the stock are 6 BUY, 2 Outperform and 6 Hold. In this fully valued market you should buy in small increments on market dips.

The Insider purchasing at 3, 6 and 12 months are all favorable to the purchase side. This company is just a very steady performer: the kind of company you want to own in this kind of volatile stock market. 
A good railroad can carry a ton of freight 436 miles on one gallon of diesel fuel. That is still the world's cheapest way to move it. You better have a good braking system in place with that much weight in motion to slow it down when you need to. WABTEC provides that solution to the railroads of the world. 

I wouldn't be in a hurry to buy anything this week in US markets until things settle down a little bit.

Nikola Tesla and George Westinghouse. partners on A/C Electricity

Have a great weekend and a good week. Make a better life for yourself, save money and buy stocks.


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