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Burned by Greenbrier

Monday, 23 Apr 2012 | 12:48 PM ET

A long position in Greenbrier looked like a hot trade, but so far all it’s done is burn Mike Murphy. Now what?

Murphy of Rosecliff Capital made the fateful call back on April 9th. At the time his thesis was that the stock had been oversold despite solid fundamentals.

“Earnings were solid,” he said. “They’ve been getting killed recently. No exposure to coal so I think this company can rally a lot from here.”

Unfortunately, since he suggested a long position, jitters about global growth have sent shares of this rail and barge builder down more than 10%.

What’s the trade, now?

“My opinion hasn’t changed. I’m still long," says Murphy on Monday April 23rd. "Coal has really hurt the space a lot but Greenbrier is really focused on intermodal cars and recent data says intermodal orders have spiked. I still believe Greenbrier is cheap and that the stock is going to rally.”

Is Bottom In for Housing?
The FMHR traders discuss whether Greenbrier is off track, since shares of the company are down 30% year-to-date. Megan McGrath, MKM Partners homebuilder analyst, also weighs in on whether D.R. Horton's earnings beat signals a strong Spring for housing.





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Trader disclosure: On Apr 23, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long JOY; Joe Terranova is long HPQ; Joe Terranova is long LQD; Joe Terranova is long JPM; Joe Terranova is long NXPI; JJ Kinahan is long AAPL Options; JJ Kinahan is long C; JJ Kinahan is short GS puts; JJ Kinahan is short WFC puts; JJ Kinahan is long TLT; JJ Kinahan is long CSCO; JJ Kinahan is short YHOO puts; JJ Kinahan is short SPY; Mike Murphy is long BAC; Mike Murphy is long JPM; Mike Murphy is long INTC; Mike Murphy is long ANF; Mike Murphy is long SBUX; Mike Murphy is long FCX; Mike Murphy is long PHM; Brian Kelly is long LWM; Brian Kelly is long KRE; Brian Kelly is long USG; Brian Kelly is long BUNDS; Brian Kelly is short EWW; Brian Kelly is short FTSE 100; Brian Kelly is short EURO STOXX BANKS; Brian Kelly is short YEN

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