Saturday, February 12, 2011

Valuation of RailAmerica

RailAmerica, Inc. (NYSE: RA) ( www.railamerica.com )engages in the ownership and operation of short line and regional freight railroads in North America. As of December 31, 2009, it operated a portfolio of 40 individual railroads with approximately 7,400 miles of track in 27 U.S. states and 3 Canadian provinces. The company provides rail freight transportation services for a range of products, such as farm and food products, lumber and forest products, paper and paper products, metals, chemicals, and coal products, as well as offers ancillary rail services. The company was incorporated in 1992 and is headquartered in Jacksonville, Florida. (Source: Yahoo Finance)

As of February 12, 2011, its 52 week stock price range was $9.16 - 13.61. As of December 31, 2009, it had a net income of $15,842,000 and long term debt of $643,109,000 and net tangible assets of $321,908,000.

As of February 12, 2011, no information concerning sustainability or social responsibility operations could be found on their website, however, they have a strong orientation towards safety. Like all major freight railways at this time, they haul pretty much everything, including non-sustainable freight and products such as coal. There are articles and press releases that were found by preforming keyword searches using “RailAmerica goes green”. One such press release can be found here.

RailAmerica is a Green Business, however, it still hauls freight for unsustainable operations which limit its capacity to make a full transition to a Basic Green Business. This business is properly valued at this time. It has a stable financial portfolio, a good level of infrastructure, and a strong market position. It will benefit by continuing its efforts to make the green transition as well as adding more information to its website.