A Wall Street Transcript Interview with Justin Long, Research Analyst at Stephens Inc.: As Economy Improves Will Renting Turn to Leasing?

Wall Street Transcript

67 WALL STREET, New York - December 27, 2013 - The Wall Street Transcript has just published its Industrial Equipment, Aerospace and Defense Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Defense Budget Uncertainty - Capital Equipment Technology Investing - Growth Opportunities in Data Security - International Consumption Growth - Professional Security Equipment

Companies include: Ryder System, Inc. (R), Penske Automotive Group, Inc. (PAG), GATX Corp. (GMT), Greenbrier Companies (GBX), Trinity Industries Inc. (TRN) and many others.

In the following excerpt from the Industrial Equipment, Aerospace and Defense Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Leasing and rental is a broad space. Where is your focus?

Mr. Long: My focus is on leasing and rental within the transportation sector. More specifically, I cover companies with exposure to this market through the ownership of commercial truck equipment and railcar equipment.

TWST: This has always been a cyclical business. Where are we in the cycle?

Mr. Long: I think you really have to differentiate between my two areas of focus: commercial truck equipment and railcar equipment. In commercial truck equipment, we have seen the rental market strengthen over the past year on the heels of a somewhat volatile demand environment in 2012. Typically, you think of rental as being a leading indicator for the leasing business, and really the economy in general, but we've still yet to see the leasing business pick up to a material degree this cycle. This is mainly due to hesitancy among some shippers to sign up for longer-term contracts, which in the case of commercial truck leasing, will be a term of about six years on average.

That being said, I think we are nearing an inflection point where we should start to see the leasing market improve as the economy continues to recover. I cover Ryder (R), who is one of the major players in this market, and they experienced a pickup in their full-service lease business in the third quarter of this year, and the company's outlook for this operation seems a bit more optimistic than what we've heard over the past year or so. We'll see how things progress and if a slow-growth macroeconomy continues, but we are probably in the early innings of that market accelerating.

TWST: Let's stay with the trucks then. Is the slow pickup just a reflection of the general concern about the economy?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Rates

View Comments (0)