Isn't the problem for Norfolk Southern that coal shipments are down due to natural gas substitution in power plants? And the first quarter GDP growth of 0.2% means fewer goods were transported by rail than analysts assumed? Not clear to me how this is a management deficiency.
Is CSX the RR that declined merger talks with CP? Suppose the largest shareholder of CP turns out to be the CSX suitor? That would be Mr. Ackman.
All the accusations are anonymous, Whoever spoke with Patrick Lee, reporter at Bloomberg, can deny he said anything. So there cannot be any perjury. That is the beauty of anonymous accusations.
What is the worst case for Trinity Industries? DOJ could arrest Trinity CEO at his home, and "perp walk" him in front of his neighbors. Judge Gilstrap could ignore science and evidence, and award huge penalties for every ET-Plus endplate ever manufactured. Fifth Circuit could decline to hear appeal. Case could follow the trajectory of the BP Deepwater Horizon spill in 2010, where company settled with U.S. government, but continued to fight claims from multiple state and local agencies, and individual claimants, so that after five years elapsed, $42 billion has been paid ,and no end is in sight.
It worries me that the standard of proof in the trial was only for a few competitors to allege that the guardrails were "dangerous". All it took was a few photographs and the competitors's claims. Nobody ever proved anything, at least not the way a scientist would expect. Nobody cares that the Eastern District in Texas is world-renowned for huge jury verdicts against corporations.
The news release seemed designed to be dramatic, and damage the stock price abruptly. It worries me that a team of U.S. government officials, plaintiff's lawyers, and short sellers can work to damage the price of a U.S. corporation with minimal evidence, and loot the assets of the corporation and its shareholders.
The "news" of the Federal investigation which was leaked to Bloomberg pushed the price of Trinity shares downwards, without any specific allegations. It was all vague innuendo and smoke. What was the purpose of the "leak", unless it was to move the share price?
Today, nearly one day's volume has traded in the first 1.5 hours of trading. There has been no news. Am I the only person who finds this unusual?
I assume either (1) CSX is repurchasing its own shares, or (2)an algorithmic trader is manipulating CSX share price. Other possibilities include a pending merger announcement, or a hedge fund getting involved. There sure are a lot of robot generated messages here--not sure why that is occurring.
What makes you think UNP isn't going to disappoint? Their car loading stats look pretty weak, compared with expectations for revenue growth...
"NTSB wants all tanks in a blanket" is the title of an article which states the new tank car standards from the NTSB will be published on approximately May 15. Should be good for a deluge of new orders for Trinity and Greenbrier.
Maybe there's an obscure index, similar to iShares Transportation Average (IYT), which forces all RR's to rise and fall in unison. Or perhaps a group of hedge funds that trades exclusively based on the insight which can be gleaned from newspaper headlines.
WSJ article, "A New Battle in Oil-Car Controversy", says Burlington Northern Santa Fe penalizing shippers for using DOT-111s tankers. Each railcar transports 700 bbls so cost per bbl is about $1.50. This is added on to the transportation cost of $10 per bbl. for oil-by-rail. Encourages shippers to employ newer tank cars.
Transcript of trial reveals the three jury findings:
Next looking to Page 1 of the verdict, Question 1: Do
you find from a preponderance of the evidence that Defendant,
Trinity Industries, Inc., knowingly made, used, or caused to be
made or used a false record or statement material to a false or
The answer is yes.
Question 2: Do you find from a preponderance of the
evidence that the Defendant, Trinity Highway Products, LLC,
knowingly made, used, or caused to be made or used a false
record or statement material to a false or fraudulent claim?
The answer is yes.
Turning to Question 3: What amount of money, if any,
do you find from a preponderance of the evidence to be the
damages that the United States Government has sustained because
of the acts of the Defendant or Defendants that you have found
to have violated the False Claims Act? Answer in dollars.
And the answer provided by the jury is $175 million.
I'll hand the completed verdict form to the courtroom
deputy to be maintained as a part of the record in this case.
Guardrails Said to Pass Safety Tests
Google search above link. NYT article reveals powerful U.S. Senator intervening in dispute, calling for investigation of FHWA..
2015 EPS estimate $2.58. Forward P/E ratio 19.7x at today's price $50.9/share. Buying here requires extremely long term time horizon.
Wall street loved Q4 earnings, and shares are soaring after hours. Can't explain why shares jumped 6.28% before earnings were announced. It seems to me that the share buyback was slightly less than I expected, and the effective tax rate was quite a bit better than anticipated. Cash is gone, and backlog has shrunk.
Q4 Revenue--$122.6 million vs. estimate=$101.9 million
Net income 53 cents vs estimate 40 cents in Q4
Eff Tax rate for 2014 was 32.5% vs 36.5% in 2013
Cash +cash equivalents=$8.9 mn vs $55.1 mn in 2013
Backordered units=651,400 vs 1,520,800
Shares outstanding reduced from 19.3 million to 18.7 million, or about 3.2% due to buyback
Distributor inventory 326,700--company inventory 104,200
Can anybody predict 2015 earnings?
Railway Age article says the diluent added to bitumen (to make it less viscous) lowers the flash point of the mixture, making it highly explosive--e.g.CN derailment and explosion in Ontario at subzero temperatures. CSX derailment and fireballs stemmed from transport of Bakken crude oil.