Why FreightCar America (RAIL) Could Benefit as North America’s Railcar Fleet Gets Older

Why FreightCar America (RAIL) Could Benefit as North America’s Railcar Fleet Gets Older

Fri, September 4, 2026 at 5:27 PM GMT+3 3 min read

• NASDAQ

Diamond Hill Capital, a First Eagle Investment Management company, issued its Q2 2026 investor letter for its "Small Cap Strategy". The letter can be downloaded here. The strategy returned 24.01% in the second quarter, outperforming the Russell 2000 Index's 21.49% return. Performance was positively affected by stock selection in health care and industrials, while the Fund's underweight position in information technology was the largest relative detractor as AI-related companies drove market gains. Small-cap equities benefited from strong earnings, resilient economic conditions, and easing geopolitical concerns, with technology leading sector performance while energy declined alongside lower oil prices. Despite the market's focus on AI, the Fund's strongest contributors came from businesses outside the theme, particularly in health care, defense-oriented companies, and tangible-asset industries. Looking ahead, the Fund remains focused on resilient, underfollowed companies tied to infrastructure, defense modernization, and essential industries where disciplined capital allocation and long-term demand can support value creation. Also, check the fund's top five holdings to see its best picks in 2026.

In its second-quarter 2026 investor letter, Diamond Hill Capital Small Cap Strategy highlighted FreightCar America, Inc. (NASDAQ:RAIL). The strategy initiated a position in FreightCar America, Inc. (NASDAQ:RAIL), which designs, manufactures, and sells railcars and railcar components for the transportation of bulk commodities and containerized freight products, during the quarter. On September 03, 2026, FreightCar America, Inc. (NASDAQ:RAIL) closed at $7.01 per share. Over the past month, FreightCar America, Inc. (NASDAQ:RAIL) declined 11.71%, and its shares lost 16.15% over the past 52 weeks. FreightCar America, Inc. (NASDAQ:RAIL) has a market capitalization of $220.03 million.

Diamond Hill Capital Small Cap Strategy stated the following regarding FreightCar America, Inc. (NASDAQ:RAIL) in its Q2 2026 investor letter:

"FreightCar America, Inc. (NASDAQ:RAIL) manufactures railcars for the North American freight market. We initiated a position in 2Q26 as we believe the company is well positioned to benefit from an aging railcar fleet that will require replacement as well as improving industry pricing. Additionally, the company's vertically integrated manufacturing operations provide a cost and delivery advantage, while recent margin improvement reflects operational progress."

FreightCar America, Inc. (NASDAQ:RAIL) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held FreightCar America, Inc. (NASDAQ:RAIL) at the end of the second quarter which was 20 in the previous quarter. While we acknowledge the potential of FreightCar America, Inc. (NASDAQ:RAIL) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered FreightCar America, Inc. (NASDAQ:RAIL) and shared best railroad stocks to invest in. According to Billionaires. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.