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Linn Co, LLC Message Board

save_n_investte 13 posts  |  Last Activity: Apr 11, 2014 11:13 AM Member since: Aug 14, 2012
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  • save_n_investte by save_n_investte Feb 10, 2014 12:03 PM Flag

    Rail transport is an excellent business. The major companies involved all have steadily rising sales and profits, they all have strong profit margins, and they return capital to shareholders while retaining enough to reinvest in their businesses.

    But at any given time there are usually one or two railroads that are out of favor. While the major railroad companies all have similar businesses, they have different geographies, and they therefore transport different goods. As some of these goods come into or fall out of favor, the related railroad companies’ share prices react accordingly.

    Coal has been a particular weak spot for the railroad industry over the past few years, and those railroads that operate on the East Cost of the United States – Norfolk Southern and CSX have seen this weakness in their businesses.

    Norfolk Southern felt coal-related weakness in 2011 and 2012, though the company has since recovered as a result of greater efficiencies and increased exposure to other sectors of the economy. During that same timeframe, CSX felt this weakness, but not nearly to the extent that Norfolk Southern did. As a result, CSX shares handily outperformed.

    But over the past several months, the two East Coast railroads’ situations appear to have switched. During this most recent earnings season, Norfolk Southern reported strong year-over-year results, no doubt a result of 2012 weakness.

    As a result, the shares rose to a new all-time high of $95.10 per share. On the other hand, CSX reported a relatively weak earnings number, and the shares fell from a high of $29.25 on January 14 to a low of $25.88 on January 27. This is a sizeable fall in the share price of a relatively stable company that has shown profitability and stability even in a weak economy.

    Continued in reply to this message.

  • Reply to

    Article on CSX, NSC, RR Business

    by save_n_investte Feb 10, 2014 12:03 PM
    save_n_investte save_n_investte Feb 10, 2014 12:05 PM Flag

    Continuation of article:

    CSX’s weak earnings number was the result of lower profits resulting from a decline in profit margins — a result of a reduction in coal shipments. But we have seen this story play out very recently with CSX competitor Norfolk Southern. While weakness persisted in that company’s earnings and share price for a couple of years, this weakness turned out to be a great buying opportunity.

    I suspect that something similar with happen with shares of CSX. They will not immediately jump to all-time highs and weakness will persist, especially given the Environmental Protection Agency’s stringent regulation of the coal market. However, coal is just one part of CSX’s business, and the company’s oil, agriculture, and intermodal businesses will all continue to be strong; over time, they will overshadow weakness in coal.

    More generally, the railroad industry remains a place that investors should be putting their money. These companies are stable profit generators. They operate as a de facto oligopoly, as there are extremely high barriers to entry. Furthermore, with rising fuel costs, rail transport is a better option than truck or air freight for those looking to ship large amounts of goods.

    This economic advantage is compounded when we realize that railroads have far smaller labor costs than trucking and air freight companies. A train is akin to hundreds of trucks linked together. But while 100 trucks need 100 drivers, a train needs just one engineer.

    With the railroad industry as strong as it is and with temporary weakness in CSX’s business and share price, I think the shares offer a unique opportunity for long-term investors.

  • save_n_investte by save_n_investte Feb 10, 2014 2:17 PM Flag

    Article on CSX, NSC, RR Business.

    Rail transport is an excellent business. The major companies involved all have steadily rising sales and profits, they all have strong profit margins, and they return capital to shareholders while retaining enough to reinvest in their businesses.

    But at any given time there are usually one or two railroads that are out of favor. While the major railroad companies all have similar businesses, they have different geographies, and they therefore transport different goods. As some of these goods come into or fall out of favor, the related railroad companies’ share prices react accordingly.

    Coal has been a particular weak spot for the railroad industry over the past few years, and those railroads that operate on the East Cost of the United States – Norfolk Southern and CSX have seen this weakness in their businesses.

    Norfolk Southern felt coal-related weakness in 2011 and 2012, though the company has since recovered as a result of greater efficiencies and increased exposure to other sectors of the economy. During that same timeframe, CSX felt this weakness, but not nearly to the extent that Norfolk Southern did. As a result, CSX shares handily outperformed.

    But over the past several months, the two East Coast railroads’ situations appear to have switched. During this most recent earnings season, Norfolk Southern reported strong year-over-year results, no doubt a result of 2012 weakness.

    As a result, the shares rose to a new all-time high of $95.10 per share. On the other hand, CSX reported a relatively weak earnings number, and the shares fell from a high of $29.25 on January 14 to a low of $25.88 on January 27. This is a sizeable fall in the share price of a relatively stable company that has shown profitability and stability even in a weak economy.

    Continued in reply to this message.

  • Reply to

    NSC and CSX

    by save_n_investte Feb 10, 2014 2:17 PM
    save_n_investte save_n_investte Feb 10, 2014 2:18 PM Flag

    Continuation of article:

    CSX’s weak earnings number was the result of lower profits resulting from a decline in profit margins — a result of a reduction in coal shipments. But we have seen this story play out very recently with CSX competitor Norfolk Southern. While weakness persisted in that company’s earnings and share price for a couple of years, this weakness turned out to be a great buying opportunity.

    I suspect that something similar with happen with shares of CSX. They will not immediately jump to all-time highs and weakness will persist, especially given the Environmental Protection Agency’s stringent regulation of the coal market. However, coal is just one part of CSX’s business, and the company’s oil, agriculture, and intermodal businesses will all continue to be strong; over time, they will overshadow weakness in coal.

    More generally, the railroad industry remains a place that investors should be putting their money. These companies are stable profit generators. They operate as a de facto oligopoly, as there are extremely high barriers to entry. Furthermore, with rising fuel costs, rail transport is a better option than truck or air freight for those looking to ship large amounts of goods.

    This economic advantage is compounded when we realize that railroads have far smaller labor costs than trucking and air freight companies. A train is akin to hundreds of trucks linked together. But while 100 trucks need 100 drivers, a train needs just one engineer.

    With the railroad industry as strong as it is and with temporary weakness in CSX’s business and share price, I think the shares offer a unique opportunity for long-term investors.

  • save_n_investte by save_n_investte Feb 13, 2014 7:17 PM Flag

    Comes out to be a 12.5% increase, pretty generous. The next and more important step for OXY is to increase the pps. Hopefully, OXY's reorganizational plans will achieve that objective.

  • Reply to

    OXY Has Been Bery, Bery Good To Me!

    by save_n_investte Feb 15, 2014 11:09 AM
    save_n_investte save_n_investte Feb 16, 2014 12:57 PM Flag

    "Pier One Imports returned 250 to 1"

    Hahaha!!!!! I'm actually posting about my 12 bagger in OXY, not in some 'pie in the sky' that I could have/would have/should have got. You can examine the history of a number of stocks and 'cherry pick' those that have outperformed OXY. But I'm posting about actual results. So, keep on researching your 'bitcoin' stocks that have exploded a bazillion percent, but stocks you never invested in at their low point.

  • Reply to

    OXY Has Been Bery, Bery Good To Me!

    by save_n_investte Feb 15, 2014 11:09 AM
    save_n_investte save_n_investte Feb 16, 2014 1:18 PM Flag

    "Pier One Imports returned 250 to 1 .."

    Joe is posting about 'possible pie in the sky profits' that he never made. I'm talking about actual profits I made from OXY. Joe, why didn't you bring up examples of Apple, Google, or some other stock where you could have made billions, but didn't. Joe is only a do-nothing dreamer who is envious of those that have actually realized great profits from OXY.

    Hey, Joe, keep on dreamin, but that's all you'll ever do is dream.

  • Reply to

    Up $42k this month on CSX

    by dixiegfc104 Mar 6, 2014 2:46 AM
    save_n_investte save_n_investte Mar 6, 2014 10:08 AM Flag

    Hey Dixie, take your spam/scam website recommendations elsewhere. Nobody believes your post. CSX has gained about a dollar a share this month. So, if you've made $42k on that gain, that means you own 42,000 shares of CSX with a value of $1.2million. Yeah sure Dixie, you're going to invest over a million in a stock because you heard something on a phoney/baloney website. I surely believe your story. NOT!!!!!!!!!!!!

    Take your spam elsewhere and, in the future, make your numbers believable. Hahahahahahahahaha!!!!!!!!

  • save_n_investte by save_n_investte Mar 7, 2014 8:14 AM Flag

    From Cramer's column:

    CEO Michael Ward says he is optimistic about coal; he had expected flat volumes, but in the coming year, coal volumes may be positive. In recent quarters, CSX was losing revenue in coal, but was replacing the loss with growth in other sectors. About 6% of CSX's business is related to housing, so the increase in housing starts should be a tailwind. The increase in auto production is also a bright spot for the company, as well as a rise in production of chemicals. CSX is in the process of converting many of its locomotives to natural gas. Oil companies are using rail for transport, and Ward expects a 50% increase in the oil segment of the business this year. Cramer thinks CSX is going higher.

  • save_n_investte save_n_investte Mar 8, 2014 12:34 PM Flag

    It's because NSC had a better quarterly report than CSX. NSC beat the Street's projections while CSX fell short. Also, at the end of the quarter, NSC projected a much more optimistic outlook for their operations, while CSX projected same-o-same-o for the next quarter. I'm not sure, but I think that NSC also boosted their dividend payout while CSX stood pat on their dividends. JMHO.

  • News from todays analyst meeting with COP management:

    .

    ConocoPhillips Outlines Plans for Growth and Returns at Analyst Meeting

    NEW YORK--(BUSINESS WIRE)--

    ConocoPhillips (COP) today reaffirmed its objective to deliver double-digit returns annually to shareholders at its Analyst Meeting held at the New York Stock Exchange. Members of the company’s executive leadership team outlined ConocoPhillips’ goal to consistently deliver 3 to 5 percent compound annual growth in production and margins, with a compelling dividend, from a diversified, high-quality portfolio.

    “ConocoPhillips is set for growth,” said Chairman and Chief Executive Officer Ryan Lance. “Beginning this year, we will be growing production and margins across our diverse asset base, and allocating 95 percent of our annual capital expenditures to growth projects and programs with margins that are higher than our average margin today. We believe we have the asset base, technical capability, world-class workforce and financial strength to deliver on our unique value proposition.”

  • save_n_investte by save_n_investte Apr 11, 2014 11:02 AM Flag

    It's the soothing sound of 'drip/drip/drip', the sound of my COP dividends being reinvested each quarter, four times every year, and buying more COP shares for me, through the dividend reinvestment program. And that drip sound allows me to comfortably ignore wild market swings, like those that have been occurring in the market this week. The drip sound also allows me to sleep very well during bear and correction markets as I'm able buy more shares at lower prices. What a nice sound, drip/drip/drip, like a cool rain falling on the roof during a hot day. Good luck to all COP longs and to drip investors.

  • Reply to

    HEY!!!!!!!!!! WHAT'S THAT SOUND?

    by save_n_investte Apr 11, 2014 11:02 AM
    save_n_investte save_n_investte Apr 11, 2014 11:13 AM Flag

    DRIP = Income Averaging and compounding at it's best. And COP's dividends are generous. If you want to save for retirement, kid's education, or any other long term objective, DRIP is the way to do it.

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