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All the stars are aligning for the railcar manufacturers. The Greenbrier Companies (GBX - Snapshot Report) is expected to grow earnings by 264% in fiscal 2012 as railcar demand remains strong. This Zacks #2 Rank (Buy) is also cheap, with a forward P/E of just 10.7.

Greenbrier makes new railroad freight cars in 3 manufacturing facilities in the United States and Mexico and marine barges at the U.S. location. It also builds new railroad freight cars for European customers through operations in Poland and subcontractor facilities throughout Europe.

The company also repairs and refurbishes freight cars and provides wheels and railcar parts at 38 locations in North America.

Greenbrier Beat By 37% in the Fiscal First Quarter of 2012

We've already heard from Greenbrier this earnings season. On Jan 6, the company reported fiscal first quarter results and blew by the Zacks Consensus Estimate by 13 cents.

Earnings per share were 48 cents compared to the consensus of 35 cents. This was a big turnaround compared to the year ago quarter in which the company lost 11 cents a share.

Revenue doubled to $398.2 million from $198.9 million in the first quarter of fiscal 2011. The manufacturing segment killed it in the quarter, with revenue soaring to $262.7 million from $85.4 million a year ago.

Manufacturing gross margin also jumped to 10.1% from 6.7% in the first quarter last year due to a more favorable product mix, efficiencies gained by higher production rates and higher volumes of leased railcar syndications.

Increasing Production

Greenbrier now has an impressive backlog of 13,300 units, as of Nov 30, 2011, with an estimated value of $1.1 billion. That is up from 8,100 units with an estimated value of $580 million as of Nov 30, 2010.

Given the strong demand, Greenbrier has been ramping up production in North America, increasing production rates on existing lines and re-opening previously idle production lines to meet demand.

It expects industry demand to remain solid, especially as the US energy market, a big customer of the rails, remains strong.

Analysts Loved the Report and Raised 2012 Estimates

The analysts have been bullish on this company for months so it's not surprising that the recent earnings report resulted in upward estimate revisions.

Since the report, 10 out of 12 estimates moved higher for fiscal 2012 pushing the Zacks Consensus up to $2.15 from $2.01.

That is huge earnings growth of 264% as the company made just 56 cents in all of fiscal 2011.

Greenbrier Is a Value Stock

There was a huge buying opportunity in the summer of 2011 when shares sold off in the general stock market meltdown.

Since then, shares have rebounded but haven't yet retaken the 2011 highs.

But even with the rebound, Greenbrier is cheap. Not only does it have a P/E of just 10.6, it has a price-to-book ratio of only 1.6. A P/B ratio under 3.0 usually indicates value.

Additionally, it has a low price-to-sales ratio of 0.4. A P/S under 1.0 can mean a company is undervalued.

With Greenbrier's big backlog, as long as the rail cycle continues to be solid, strong earnings in fiscal 2012 are nearly guaranteed.

But this is a value stock that is flying under the radar in an industry that is seeing high volume and growth. That's a magic combination.

This Week's Value Zacks Rank Buy Stocks

Specialty medical products are still in strong demand. The Cooper Companies, Inc. (COO) reported a record fiscal 2011 in December as revenue rose 15%. This Zacks #1 Rank (Strong Buy) has attractive valuations, with a forward P/E of 14.4. Read the full article.

Interline Brands, Inc. (IBI) has been able to grow its facility maintenance business even as it keeps one eye closely trained on economic trends. So far, this strategy is working as the company is expected to grow EPS by the double digits in 2012. This Zacks #1 Rank (Strong Buy) also is a value stock, with a really low price-to-sales ratio of just 0.5. Read the full article.

Energy Partners Limited (EPL) has been using acquisitions to expand production in the Gulf of Mexico. Higher crude prices and increased production has been a boom for earnings which are expected to rise in the double digits in 2012. This Zacks #1 Rank (Strong Buy) is not just a growth stock, but also has value with a forward P/E under 10. Read the full article.

Are the global specialty chemical makers still hot? We're about to find out as PolyOne Corporation (POL) is expected to report fourth quarter results on Feb 2. After a record 2010, this Zacks #1 Rank (Strong Buy) is still expected to see 15% earnings growth in 2011. But what will be the outlook for 2012? Read the full article.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at traceyryniec.

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