KSU is the worst? The P/E is high, and it looks like the only salvation is a buyout. But then again- that's how I bought UNP at 58 (and sold at 80). Sometimes these poorly managed railroads can improve somewhat, and reward patient investors.
If you open the one year chart on BNI, NSC, UNP, and KSU, you could see KSU is the worst performer for the one year period of time. What the chart shows though is that KSU was the leader until about mid January, where it got its haircut while the other three advanced sharply. Now, that is nothing but charts and numbers--says nothing about the operations.
I think the chart makes KSU at least more interesting to look at as an investment because it has "corrected" or got hit with bad news--I have not done any DD other than look at the chart and some of the recent headlines.
I did well buying CNW stock (got lucky) right in front of UNPs take out of them. KSU probably has the best north south lines in the midwest and the franchise would probably be beneficial to either UNP or BNI.
With that being said though, I really don't think the government will allow another merger to take place in the near future. In addition, it may break the competitive balance--if you can call it that--between UNP and BNI.
UNP pretty much botched the SP merger and blew the views on RxR needs and their predictions of the future economy.
I did some trading in the stock in 05. In at 66.50, out at 68.53, in at 68.15, in more at 66.93, out some at 70.21 and totally out at 73.49. The run to the mid 80's made me regret getting totally out, particularly with what I was seeing and hearing about in performance improvement. Fortunately I got back in at 79.01 on 1/5 of this year.
I think you have to look forward and with UNP right now, I see lots of green lights right now.
I have wondered if UNP would be interested in KSU. There are a few ex-UP officials that are running KSU. Two of them are Art Schoener the chief operating officer and Jerry Heavin a senior vice president. I had a few conversations with Jerry when he was my superintendent. He seemed like a smart man, even though he learned the hard way to be to tough with us. Art was known as the hatchet man. He went around the system closing down buildings and selling off everything he thought UP didn't need. Some would say he went too far.