Why does the street love this company as much as it does?
I understand their model - buy short-line assets, create a network and run them more efficiently than the long-haul, mine, utility or manufacturing company - yeah I get that - that's why, usually when this company does an acquisition, the stock price goes UP.
But the nimrod who runs the Australia division was a HOP board member, MX was sold, traffic's down, natural gas is cheap, the Democrats hate coal-fired power, and we're headed for a landing - whether soft or hard - that will reduce shipments of cardboard boxes and other paper products.
And they can't keep acquiring forever, there are only so many rail assets to buy up - so at some point the ROI will drop off and they'll actually have to pay a dividend like the other railroads.
Yet this stock hit a floor of resistance after its drop six months ago and has since made up half the drop - - - - folks this stock is worth $25-$26.
Regardless of your argument that Democrats dislike coal fired electricity plants.... I still believe Democrats actually like electricity.
Since at this time there is not a viable alternative to coal fired plants on a large scale ... and coal is expected to increase as a fuel to produce electricity ...and electricity demand is expected to continue to increase.... whether you and Democrats like it or not.... coal use will also continue to increase.
Sometimes you have to do things you do not particularly approve of huh?
This fellow "truthsfifth" must be a fan of the Fox News Channel. Throw out negatives in regards to anyone at odds with our curent Warrior President regardless of the realities of the issue.
If the Democrats have taken on a crusade to reduce coal fired electricity it is news to me. Calif200 you are absolutely correct, currently there is no viable alternative to coal as a source of electricity and demand does keep increasing and even in an economic downturn most folks will keep using there big screen TVs, PCs, and air conditioners. However the housing crunch could very well decrease shipments by GWR of things like gypsum and lumber, bad for the bottom line no doubt about it. I dont see truthsifth hanging that one on greedy pro-Republican bankers who caused the sub-prime fiasco.
I find several flaws in the underpinnings of your implication that "the street" is mistaken in it's high regard for GWR.
First of, en argumento (for the sake of argument) if it comes to pass GWR begins to pay dividends. So what? What is so bad about that?
Secondly, a slowing economy usually lowers most publically listed companies's returns. Why single out GWR for special decline in the coming downturn?
Thirdly, gimmie a break as far as " the Democrats hate coal-fired power". Sure Democrats are more concerned with the problems of carbon based fuel consumption such as air pollution, acid rain and global warming than the likes of Dick "Big Oil" Cheney and right-wing gab-meister Rush "It's junk science!" Limbaugh. But there is no move afoot in the Democratically controlled Congress to restrict coal burning electic plants, even if there were the Dems are too busy trying to sort out GW's mess in Iraq anyway! And even if altenative fuels come to replace coal as part of an overall energy conservation plan, energy efficient railroads can be expected to benefit over gas guzzlin' 18-wheelers.
All and all based on the unconvicing reasons you give against it, I must rule in favor of Wall Street's positive view on GWR.
"Democrats hate coal-fired power". What an empty reason to give to justify his bitterness he did not get on-board (no pun intended) and make great $$$ on GWR as I and many others did. I know Democrats are generally more concerned with the problems of pollution and global warming than GOP members such as Dick "Big Oil" Cheney but to say they hate coal-fired plants, nonsense. Also many Democrats "hate" the Bush/Cheney neo-con quagmire er war in Iraq, is it ending any time soon? No it isnt just as coal using electic plants arent gonna close in the short or mid term future. Truthsfifth's predictions of bad times ahead for GWR are born of jealousy and raised on a diet of disinformation.