I am not above slummin’ it. A few weeks ago, I was scheduled to take a trip to Bismarck. With a mid-day flight and some time to kill, I decided to check out the area’s mass transit operation.

I paid my $1.60, stood behind the yellow line for twenty-two minutes and eventually boarded a small commuter train bound for the airport… I hoped. What I found once I got inside was pretty surprising. I had to actually search for a seat. Last time I hopped on this train, all four passengers had their own private cars, or so it seemed.

Record-high fuel prices are having a huge impact on commuter checking accounts. Here on the East Coast, thousands of commuters travel as far as 150 miles every day just to get to work. It is costing them the equivalent of a mortgage payment just to go to a cubicle farm. That is why many of them are hopping on subways, light rails, and other commuter trains.

All aboard…

Some cities, like New York and Boston, are seeing their mass-transit ridership surge by as much as 15%. That figure is only going to get bigger. It has created a fantastic investing opportunity.

For the last few years, I have had my eye on Wabtec Corp (WAB:NYSE). The company, also known as Westinghouse Air Brake, has already seen its revenues soar thanks to rising fuel costs. The situation will only get better.

Wabtec plays a large role in the nation’s rail industry. It makes the stuff that makes our trains work. It focuses a lot of work its work on the commuter train and subway industry. As more folks ride the rails, infrastructure improvements will be made, and Wabtec’s profits will rise.

To profit from Wabtec’s growth, investors have two options. Go long on the underlying stock (it is up about 25% this year), or enter into an options play. I am confident both will make you money. Wabtec’s share price is not going down anytime soon.

Don’t miss the train

For aggressive investors looking for quick returns, look at Wabtec’s August 50 Calls (WABJJ.X). With a share price of $44 right now, I am confident these options will be in the money relatively soon. By their expiration date, share price will greatly exceed the $50 strike price and the options will be selling at a premium.

Record fuel prices are going to hurt us all. But if we invest wisely and take advantage of the situations presented, we can more than make our money back. More folks are hopping on commuter trains every day. That is creating a rare boom for the industry. Make some money from it.

Andrew Snyder
Today’s Financial News