…is the "Beast of the East." NSC was also downgraded by Stifel without even posting earnings. NSC at under $88 is now on sale at 14x '14 earnings estimates. This a a long term quality holding. Looking out the next two years the company will benefit from increased coal shipments as the price of natgas rises and a big jump in East Coast commerce when the Panama Canal renovation is completed in 2015. Even with the downgrade Stifel has a price target of $94. On January 13, FBR raised its rating to Outperform with a target of $115.
I am long in both CSX and NSC, so I hope they do well. I'm retired, not from the RRs, and of the age where I'm not looking to take a lot of risk in order to make a fortune. I'm more interested in stable companies, like RRs, that can deliver stable and continuing profits for their shareholders.
As always, diversification is important. So, I have less than 10% total of my portfolio in the RR sector.
My training from my former day job made safety of operation a very important factor. I will never even look at NS as long as they paint their locos black. Of course, I am very nervous about CSX painting all their engines dark blue. What railroad has the best safety record, beating ALL of the Class 1s? The Orange colored Genesee & Wyoming.
All bogus events.With China and India building out solar power generation in a dead heat coal is going to slip.There is way more ng capped off for transport problems than is being sold.That will come online as the pipelines catch up.
Do you consider it "bogus" that in intermodal shipments from Asia will now come through the Panama Canal and be offloaded in east coast ports rather than being directed through Los Angeles? How many consumers are there east of the Mississippi? What is the cheapest way to deliver all of these goods throughout the northeast? Will yesterday's overreaction (my analysis) be shortly reversed? We'll see.