Best Railroad to Invest in?

[crazytiger]

I was wondering what do y'all think is the best RR to invest in? Why?

[GOLDEN-ARM]

you have come to a railfan board, to solicit investment advice? are you serious? >:C

[frank754]

Well it looks like Warren Buffet has a big stake in BNSF, and he seems to have done well.
I think the big western lines are becoming all the more profitable running all they can handle, especially as diesel costs go up for truckers.
http://www.huffingtonpost.com/2009/11/0 ... 43418.html

http://www.bloomberg.com/news/2011-02-2 ... nings.html

[Jeff Smith]

Some news on investment prices for P&W, with references to other roads: http://www.marketnewsvideo.com/article/ ... 1book.htm/

In trading on Tuesday, shares of Providence & Worcester Railroad Co. (NASDAQ:PWX) crossed below their last reported book value — defined as common shareholder equity per share — of $15.05, changing hands as low as $15.00 per share. Providence & Worcester Railroad Co. shares are currently trading down about 1.2% on the day. The chart below shows the one year performance of PWX shares, versus its 50 and 200 day moving averages:

Tweeted and linked on Facebook.

[Gilbert B Norman]

I wholly concur with the admonishment set forth by Mr. Golden Arm, and absent holding proper licensure granted by the Financial Industry Regulatory Agency (FINRA), one is best advised not to publicly comment about the future performance of any security.

I will limit my comments to this topic only to past performance by noting that of the six publicly traded "large cap' North American railroads, only the Canadian Pacific trails the S&P 500 YTD 2011 as illustrated by this chart available at MSN.com:

http://moneycentral.msn.com/investor/ch ... kie=1&SZ=0

[RDGTRANSMUSEUM]

look up the RAILFAX website,do your own research.

[Gilbert B Norman]

The Wall Street Journal carried an article yesterday suggesting "the bloom is off the rose":

http://www.wsj.com/articles/trains-must ... 1428879315" onclick="window.open(this.href);return false;

Come on Journal, haven't you got a file photo depicting what railroading is all about today?

The most interesting factoid I gleaned was that BNSF is such a dominant oil carrier with 70% of the trains originated; I would have thought that SOO would have held a greater portion of the market.

disclaimer: author holds long positions CSX KSU UNP; unfortunately at this time, all are S&P "underperform".

[Gilbert B Norman]

Several interesting articles have appeared in the Journal over the past several days. On Monday, this article, while prompted by CSX upcoming earnings report, relates to the industry as a whole. A quick review will show that it's "not exactly optimistic":

http://www.wsj.com/articles/csx-to-repo ... 1452421983" onclick="window.open(this.href);return false;

Fair Use:

Railroads face another rough ride this year, as global uncertainty, sliding oil and commodity markets and weakening manufacturing rattle their biggest shippers.

Beginning Tuesday, when CSX Corp. reports fourth-quarter results after the market closes, railroads are expected to deliver dour expectations for the year ahead.

The end of 2015 was hardly smooth, as an unseasonably warm winter, higher retail inventories and industrial weakness extended the year’s slide in rail volumes. Intermodal shipments—containers and trailers also carried by trucks—were an exception, but they grew only slightly.

Total U.S. rail traffic declined 2.5% last year to 28 million carloads and containers, according to the Association of American Railroads. For this year, Stephens Inc. analysts forecast a 1.6% decline.

Adding to concerns, China’s stock markets have plunged this month amid broader worries about that nation’s economy. U.S. companies have been relying on China for sales growth, and further turmoil in that market will likely affect intermodal traffic as U.S. industrial production feels the crunch

Secondly, yesterday a column expressed that, optimism or not, CSX represents a good buying opportunity:

http://www.wsj.com/articles/railroad-cs ... 1452540689" onclick="window.open(this.href);return false;

Fair Use:

Analysts commend CSX’s productivity improvements in recent quarters which are helping offset weaker-than-expected volumes. Other growth drivers such as burgeoning “intermodal” transport—moving goods from ship to truck to rail—also are promising.

That leaves CSX shares attractively priced. Trading at its lowest level since the summer of 2013, the stock fetches just 12 times projected earnings over the next 12 months—a 16% discount to its average multiple over the past three years.

It is always hard to see what lies just around the bend, but this train should gather steam once the view clears.

Finally, the Journal reports today that CSX "beat the Street" by $.02 per share:

http://www.wsj.com/articles/csx-revenue ... 1452637962" onclick="window.open(this.href);return false;

Fair Use:

Overall, for the three months ended in December, CSX reported a profit of $466 million, or 48 cents a share, down from year-ago profit of $491 million, or 49 cents a share.

Revenue fell 13% to $2.78 billion.

Analysts surveyed by Thomson Reuters expected earnings of 46 cents a share and $2.9 billion in revenue.

As always, "we report, you decide"


disclaimers: author holds long positions CSX UNP; author holds no credentials to act as an investment advisor and only reports here material available in a globally circulated publication.