by Jeff Smith
We have never really discussed rail valuation here too much, i.e. we're not a Yahoo! Business stock forum. But I found this article interesting. What I found most interesting, especially in the light of the Genesee and Wyoming G&W acquisition of Rail America, was the idea that CSX, the Chessie come B&O come Conrail etc. east coast behemoth, could be a takeover target?
I guess if it could happen to BNSF, it could happen elsewhere, although I don't see a combination with another railroad. What about like-kind-exchanges (LKE) (Mssr. Norman
Thoughts?
CSX A Possible Takeover Target, Buy Alongside Union Pacific, Norfolk
One thing I request; if you take a pro or con position, please disclose any ownership.
Edit: I would also note that I currently hold no positions in railroads.
Disclaimer: railroad.net, it's owners and moderators make no recommendations and offers no advice as to stock ownership OF ANY KIND OR IN ANY FORM (stocks, bonds, retirement accounts, or pennies on tracks). It is up to you do your own research to confirm or refute what you may read here, and make your own decisions.
I guess if it could happen to BNSF, it could happen elsewhere, although I don't see a combination with another railroad. What about like-kind-exchanges (LKE) (Mssr. Norman
Thoughts?
CSX A Possible Takeover Target, Buy Alongside Union Pacific, Norfolk
One thing I request; if you take a pro or con position, please disclose any ownership.
Edit: I would also note that I currently hold no positions in railroads.
Disclaimer: railroad.net, it's owners and moderators make no recommendations and offers no advice as to stock ownership OF ANY KIND OR IN ANY FORM (stocks, bonds, retirement accounts, or pennies on tracks). It is up to you do your own research to confirm or refute what you may read here, and make your own decisions.
CSXSidebar: I will "Global" this for 7 days, and then park in Class I
CSX has become the most popular railroad stock on the market, as evidenced by its greater volume. It is also the cheapest on a multiples basis with a respective 12.8x and 11x past and forward earnings. The dividend yield of 2.5% also helps to offset some of the heightened volatility. Like for Union Pacific and Norfolk, I also recommend buying shares.
Whereas Union Pacific's tracks cover all of the region west of Michigan down to Mississippi, CSX covers veering to the East. The latter's tracks are generally denser and, in some cases, this leads to unnecessary costs and, in other cases, this leads to more intricate deals. At a valuation of $11.9B, I believe the firm is a possible takeover target. Antitrust regulators may have some problems with any arrangement, but there is a strong case to be made about industry value creation from wider nation-wide connections.
Next stop, Willoughby
~el Jefe :: RAILROAD.NET Site Administrator/Co-Owner; Carman at Naugatuck Railroad
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~el Jefe :: RAILROAD.NET Site Administrator/Co-Owner; Carman at Naugatuck Railroad
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