It's a little tough to value KSU becuse its Stilwell (Janus) assets are so uniquely attractive.
Post split-off, Stilwell will be the largest, fastest growing and most profitable mutual fund company in the world.
Second best might be T. Rowe Price and Associates (TROW). I like TROW a lot, and believe its P/E of 17.5:1 next year's earnings is easily justified. TROW is more profitable than almost all high-tech companies, and carries none of their obsolescence risk.
However, I like KSU much, much more than TROW.
At 17.5 next year's EPS consensus of $5.94, Stilwell's mutual fund assets are worth $103.95 on a pre-split basis. Today, the DST stake is worth more than $14 per KSU share, and the railroad should be worth roughly $7 per share.
Add it all up, and KSU is worth at least $124.95. That is today's value, and that number is growing 15% per year, minimum.
These numbers give credibility to the contention that KSU is a screaming buy at 77 11/16.
Choose your valuation method. KSU is cheap, and going up--a lot. Based on this week's price action, the market seems to be catching on to the fact that KSU is worth a lot more than the current price.
reports today that AIG ($40B revenues) is looking at US mutual funds. AIG Asset Mgt chief says Janus "meets their criteria", but "God only knows what the price would be". After the spin off, my guess is that Janus alone could be worth $125-130 a share (pre-Stilwell). Probably explains some of last week's move. Very long KSU!