We were out cross-country skiing today. Near our route was a rail line with cargo trains making use of “our” stretch of track about every 15 minutes. Watching the trains today reminded us of a stock pick we’ve been watching for a while.

For your consideration: American Railcar Industries (NASDAQ: ARII)

Normally, rail road stocks are just as boring as watching trains go by. We typically won’t recommend them, because their movement (no pun intended this time) is simply too slow for our tastes. Sometime about ARII, however, has been standing out to us over the last few months. One of the biggest incentives to buy is the fact that billionaire Carl Icahn bought more than $5 million worth of the stock back at the end of November 2007. He bought around $15 per share. Currently the stock is trading at around $17 and has been bouncing between $15 and $20 since the Icahn buy.

This stock made its IPO around $25 per share back in 2006. Icahn bought in then as well. In looking at the book value of the stock, The Money Kings find this number to be around $14 bucks a share. Hmmmmm . . .

We’ve got 1) A new stock on the market; 2) A billionaire investor sinking millions behind the company; 3) A billionaire investor sinking more millions into the company a second time over; 4) A book value near the actual share price.

Does this sound like a buy to you? We’re thinking so. We find ARII to be an excellent long term play. We know rail isn’t going anywhere. And guess what has to be transported by truck and rail due to moisture building in traditional pipelines . . . : ETHANOL. Ever heard of that stuff . . .

It seems that the smart money’s buying ARII, and The Money Kings are thinking that we all should be thinking that way as well. Do more research on this one and decide for yourself.

Happy Trading.



The Money Kings

Keywords: rail, railroad, Ichan, Carl, ARII, American, stock, pick, Sunday, IPO, ethanol