Kansas City Southern
It's no secret that the auto industry is booming. Sales jumped 14% in July, according to research by Autodata. The industry invested $3.7 billion in Mexico between 2010 and 2012, and plans to spend more this year. To keep up with demand, automakers are increasingly looking to Mexico as a solution. This is causing a trend in transportation that favors cross-border rail.
A growing trend down south...
Ford more »
When investing in a publicly traded business you want that company to maintain its ability to generate and grow free cash flow over the long term. Western railroader Union Pacific (NYSE: UNP) possesses the qualities to make that happen.
Barriers to entry
If new competitors want to enter the railroad arena they would need to spend billions of dollars to build infrastructure such as rail bridges and tunnels, not to more »
Although its based in Kansas City, Mo., the company is far more than just the north to south rail operator connecting Kansas City, Mo. and Port Arthur, Texas that was founded in 1887. Kansas City Southern (NYSE: KSU) now operates some 6,600 miles of railroad and has investments in the U.S., Mexico, and Panama.
Its network helps connect Mexico, the Southeast and Southwest U.S. This includes its more »
The Bakken play produces vast amounts of gas and oil that need to be transported, either by pipeline or railroad. Thus, as gas production expands, railroads can take advantage of the increased demand for their services. But at the same time, it causes people to use less coal, and hence, less of that needs to be shipped. As these countervailing forces play tug-of-war, the railroads' profitability -- and hence, the potential more »
One of the more interesting stock stories lately involves Class 1 railroads, the largest rail operators in the United States. At least of two them, the venerable transcontinental Union Pacific Corporation (NYSE: UNP) and the Kansas City Southern (NYSE: KSU), have shown incredible share value growth in recent months.
You’ve probably heard of the Union Pacific, but you may not be that familiar with the Kansas City Southern. Despite more »
One of the best gauges of the economic situation is the railroad industry. If the economy slows down, railroads carry fewer products, and vice versa. Railroads have been on the rise since the depth of the crisis. As the economy improved, the stocks went up. For example, Kansas City Southern (NYSE: KSU) is up more than 770% from 2009 lows. CSX (NYSE: CSX) and Union Pacific (NYSE: UNP) have made more »
With highways getting increasingly congested worldwide, especially in terms of freight transport, the good old railroad network appears to be becoming an increasingly attractive option to move goods around once again. Some of the companies in the industry are doing a good job of growing earnings as a result of this increased volume. With a fairly low valuation, a nice dividend yield and strong earnings, CSX (NYSE: CSX) in particular more »
In the past twelve months, Kansas City Southern (NYSE: KSU) has experienced significant gains on the market, heading from around $70 per share to $112.60 per share at the time of writing. At the end of 2013, Barron’s featured the company, thinking that Kansas City could increase by around 20% in the next twelve months. So is Kansas City cheap or expensive at its current price? Should investors more »
The United States is pumping out more crude oil than the country’s pipelines can carry. The risk associated with oil drilling in the United States has disappeared, as a result of innovative technologies such as hydraulic fracking. The days of U.S. oil companies scouring the world for pools of reachable crude oil are over. Equipped with technologies such as fracking, the US oil industry has flourished and volumes more »
In May, billionaire Ken Griffin’s Citadel Investment Group filed its 13F for the first quarter of 2013, disclosing many of its long positions in U.S. stocks as of the end of March. We track 13Fs from hundreds of hedge funds, primarily as part of our work developing investment strategies (we have found, for example, that the most popular small cap stocks among hedge funds earn an average excess more »
Why invest in U.S. railroads? They operate in a seller's market and enjoy strong pricing power, for one. Two, they have geographically strong moats, operating in a capital-intensive industry with high barriers of entry. And lastly, they are well positioned to benefit from the North American oil and gas boom.
Even though it can be up to five times as expensive to transport crude by train, a lack more »
American transportation companies are showing strong signs of life. From the chart below, note how well Dow Transports performed in the last 12 years relative to the S&P 500.
One reason the Dow Jones Transportation Average has done so well is because of railroad companies. Of the six industries represented in the average, the rail industry performed best.
With the economy coming back on track, I believe that the more »
Investors often have a set of metrics that they use to analyze and value each company they investigate. Each of these metrics can be useful, but it is dangerous to apply one set of analytical tools to all companies. Instead, investors should customize the set of metrics used to evaluate potential investments on a company-by-company basis.
For instance, investors who are interested in investing in a bank are not going more »
There’s a sector that’s been booming in recent months, and almost nobody seems to have noticed. That sector is—surprise—railroads. The bluest of blue chips have seen surging share prices, revenue, and earnings per share lately. The boom seems to be across the board, not just in a few big players.
A little railroad that could
The surge in share prices for rail operators has been phenomenal more »
Editor's Note: The original version incorrectly identifies the stock symbol of Bed Bath & Beyond. This version has been corrected and Motley Fool apologizes for the error.
On Monday we saw a handful of companies trade lower after analyst downgrades. Let's see whether any of them are truly worth selling.
M&A Chatter Pushes This Railroad Too High
Stifel Nicolaus made a bold call on Monday, downgrading Kansas City more »
The “Oracle of Omaha” is being examined again. But too much of the coverage implies that there's some magic formula out there that can make you a billionaire like Buffett. It's the “magic bullet” theory of investing, and I speak the truth when I say that it won't work for you.
Look, Warren Buffett appears to be a nice man. He seems a bit fond of having more »
Change is uncomfortable. America is entering into a new stage. It is not the supreme world power that it was in the 1990s. Relative to the world economy, America's economy is getting smaller. Even with these changes, it is important to remember that many American companies are huge multinationals that benefit from growth inside and outside the United States.
Is America Growing?
Just because more »
Railways have historically been popular investment vehicles. Transportation is an important aspect of domestic and global commerce, so much so that Warren Buffett’s company Berkshire Hathaway purchased one of the largest rail companies a few years ago. Here are three other railroad companies to look at for your portfolio.
First-quarter results for CSX Corporation (NYSE: CSX) and Union Pacific Corporation (NYSE: UNP) show these railroads were able to grow earnings despite little or no growth in carloads in the first quarter.
Union Pacific’s first-quarter business volumes, as measured by total revenue carloads, decreased 2% compared to 2012. Volume declines in coal and agricultural products more than offset growth in chemicals, intermodal and automotive shipments.
Union Pacific raised prices more »
Mexico is recently being seen as a land of opportunities. There have been plenty of reasons for that. A newly-elected president, close proximity of Mexico to the US, and high exposure of Mexico to the US economy are top-of-the-list factors in this respect. This has led equity managers to shortlist some super single-stock opportunities to make money in the long run, and individual investors should as well.
- Recently elected more »
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