First and foremost : Info on the Company. Any info pertinent to the Industry. Rail traffic in Clemson, S.C. is doing fine. I see a lot of tanks and a lot of cars on the trains. The highways are loaded with intermodal trucks. Charleston is readying their harbor for bigger ships carrying more goods to be transported.
CSX has just been up-graded by several brokers and has a very positive future. The stock is a long term investment, hang in there! The current price is an attractive entry level. The div. is much better than a CD.... Detroit Tigers won the American League Pennant
Sentiment: Strong Buy
CSX Corp. (CSX) saw short-selling increase significantly by 42%, or 6.4M shares. The short volume is now at 21.8M shares. Today's info. There is a fly in the ointment here. Foul play?. 12/11/2012
CSX is one of two major rail operators in the eastern portion of the U.S. CSX serves 23 states, including some of the most densely populated portions of the country, with over 21,000 route miles of track. The company derives revenue from a number of major markets including coal, automotive, industrials, agriculture, intermodal transportation and services.
I look at CSX as more than an opportunity to just collect dividends in a sideways trading market, because CSX offers significant opportunities for growth. CSX has traded sideways for more than a year, all the while increasing earnings per share 12% over the past 12 months. CSX has suffered greatly over the fear that declining coal revenue would take a big chunk out of the bottom line, but to this point the company has managed to continue growing earnings and revenue despite sharp drop-offs in coal.
CSX management has done an excellent job of reigning in costs and streamlining operations to capitalize on any opportunity that has been placed in front of them. The company is expanding margins, and expects to continue to see those grow. While the company expects declining coal shipments to remain a headwind through 2013, any uptick in coal exports could serve as a significant catalyst to drive the stock price higher.
At its current price of $19.67 CSX has a TTM P/E ratio of 11.1, well below the five-year average of 14.2. CSX anticipates EPS growth of greater than 10% annually over the next 3-5 years, and the dividend should grow right alongside earnings. At these prices CSX yields 2.8%, but over the past five years has averaged dividend growth of 22.8%. At these prices I see CSX as a great long-term buy. The dividend should continue to grow, and the share price should appreciate as well.
Intel is the world's largest semiconductor chip maker. With 2011 revenue of $54B, Intel is the undisputed industry leader. The company is most well-known for its stranglehold on the PC market, but in 2009, the company completed a reorganization to align with all of the major product groups including: PC, Data Center, Communications, and Mobility.
Weakness in PC sales and negative guidance has depressed shares of INTC over the past few months. At the current price of $20.05 INTC trades with TTM P/E ratio of 8.7, roughly half the five-year average of 17.3. While the PC market has begun to shrink INTC is making an effort to move into the world of mobile and tablets. With INTC's size, scale, and resource advantages it should be able to capitalize on these investments and gain market share in these key growth markets.
INTC pays a $0.90 cent annual dividend, which equates to a 4.5% yield at the current price. Over the past five years INTC has averaged 14.8% annual dividend growth, and currently pays just 36% of earnings as dividends. Even an immediate drop in earnings should not challenge Intel to maintain and increase the dividend in the years ahead. While the share price will likely remain depressed for some time a 4.5% yield allows me to weather the storm.
Caterpillar designs, manufactures, and sells machinery, equipment, and engines to customers around the world through its dealer network. The company is the world's largest provider of construction and mining equipment with annual revenue of $60B.
CAT has underperformed the market significantly over the past twelve months. Shares have fallen 7.6% while the S&P 500 has grown by 17.7%. CAT trades at $84.47, which gives shares a TTM P/E ratio of 8.6 versus the five-year average of 16.8. The company forecasts that challenges in the global economy will continue to persist and that growth will be tepid going forward. Although that outlook may sound grim, any uptick in economic growth worldwide should drive the price of CAT up significantly. Construction and mining cannot get done without heavy equipment, and no one provides more heavy equipment than Caterpillar.
CAT currently pays a $2.08 annual dividend, which works out to a 2.5% yield at the current price. CAT management has re-affirmed that the dividend is safe, and will not be cut despite the weakness seen in the global economy. CAT pays out just 19% of earnings as dividends, and has grown the dividend by 7.6% annually over the past 5 years. With a payout of just 19% management has the flexibility to continue to increase the dividend without negatively affecting the company's cash flow. It may take a while, but when the global economy recovers Caterpillar will be a stock that grows with it.
Sideways markets can challenge any investor. It takes a great deal of patience to ride out the turbulent times and delay the gratification of immediate returns for long-term gains. However, investors who employ a dividend growth strategy may find it easier to ride out the turbulence and reap greater long-term gains by investing in great dividend stocks at favorable valuations. The stocks identified in this article are not a comprehensive list of stocks for an investor to hold through challenging market conditions, but represent specific companies exhibiting a number of the qualities that make a stock attractive under these market conditions.
One thing that I have noticed is a significant increase in shipments of lumber and cement as well as autoracks. I am waiting for the fertilizer car movements to start.
What I have not been able to figure out is Tropicana car movements northbound to Atlanta; there used to be an average of 3 carloads on a container train per day and now there are 8 or more cars as if they are carrying something else. Since these are cars are part of the fastest freight trains on the line they have to be paying a premium rate per car..
Since Hurricane Sandy (which was not a superstorm, but the chance collision to two minor storms) I have noticed a significant increase in autorack and roll steel movement. Also more shipments of cement. The fertilizer and scrap iron movements are a little late in starting.
Here is a comment from John Light. 11/2012
Just a couple of comments to consider.
1. The barge industry is facing challenges due to low water levels. Bulk commodity shipments will be forced to shifted to rail.
2. The international demand for coal (China & India) is going to increase. Some utilities are now deciding to stick with coal (upgrading plants with scrubbers) instead of shift to gas. King Coal is not dead, but shifting to export markets and will need rail to reach ocean coal terminals. NS 's very quick recent upgrading of its Lampert Point, Virginia Coal Terminal to increase export capability is worth noting.
3. Pipelines for transporting oil & gas are not available to handle all the demand, nor do they reach all the needed market facilities. Rails do.
4. Many states are facing highway revenue challenges and are preparing to raise fuel sale taxes, increase commercial vehicle licenses fees, and in some case, restore highway tolls. Results will be increased trucking cost. Shippers and Receivers will be seeking rail cost alternatives.(trans-loading, cross-docking, consolidation, and inter-modal).
LITX Rail & Terminals Resources
Obama's ignorance and inexperience has put the nations economy in dire straits.
His energy policy has been disastrous for the nation; destroying the coal sector, not building the Keystone pipeline, no offshore oil drilling, losing tax payer money funding "green" companies who went bankrupt and on and on.
Today's price flucuations relating to sentiment, europe finances, coal shipments, and the like, are noise and only noise. This stock is long term. Hold and hold. Your profits will soar in the next couple of years. Don't loose any sleep on the noise. Above all, ignore the political radicals using this message board. They can't find anybody to listen to them at home.
On September 12, 2008, at 4:21 PM, train engineer Robert Sanchez picked up his phone to reply to a text message. Simultaneously, the train passed a red light signal and Sanchez failed to stop the train. Little did he know that his actions would lead to the Rail Safety Improvement Act of 2008 that would enforce mandatory installation of PTC systems on railways across the US by 2015, costing railroads a gut wrenching $13 billion.
5 years after the tragic rail accident of Metrolink, the end of a long and costly upgrade is much closer. Investors with a long-term time horizon can look forward to capital expenditures decreasing by about 10% when railroads complete their installation of PTC by 2015. Take CSX (NYSE: CSX) for example: During 2012, CSX has already spent 250 million on PTC related upgrades, representing over 11% of capital expenditures.
Knocking 10% off capital expenditures will have a significant impact on earnings. Due to the extensive need for reinvestment in the railroad business, capital expenditures represent a very large portion of revenue--22% to be exact (still using CSX as an example). When you add 250 million back into CSX TTM earnings, you will see that a 10% reduction in capital spending has the potential to increase earnings by up to 13%.