The above is a Yahoo 1 year chart of UNP, BNI, NSC, and KSU. Based on the charts and the recent news by KSU on restating earnings, etc., and if you think KSU's time on this earth is limited before a takeout, and KSU being 10% below its 52 week high when the others are at their highs, KSU at least looks like looking further into.
As far as UNP is concerned, all I have to do is look at local UNP traffic flows, lack of congestion, no timed out crews, to see that things look better. It is the same reason that, unless, I start seeing the teen agers going back to Old Navy, I would not touch GAP.
Even though the UP/SP merger was very painful, it is behind UP now. I think UP and the major railroads have learned valuable lessons from that merger. A merger today of profitable, financialy stable railroads would not have the same problems that the UP/SP merger did.
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.