Shares of Genesee & Wyoming (GWR) gained 9.2% on May 23 to $93.95, following reports that some investment firms are bidding to acquire the railroad operator. This significant price uptick propelled the stock to hit a 52-week high of $95.83 during the trading session.
Per a Bloomberg report, Brookfield Asset Management BAM, Blackstone Group BX, Stonepeak Infrastructure Partners and EQT Partners are in the fray to buy this railroad operator. According to sources, who have asked not to identified as there is still no official confirmation on the matter, the above-mentioned firms have proceeded into the next round of bidding. The company is reportedly seeking at least $110 per share, which translates into approximately $6.2 billion.
In fact, buyout-related rumours had surfaced earlier too. In March, it was reported that Genesee & Wyoming is looking to sell itself either entirely or partly. Reportedly, the railroad operator is in talks with various infrastructure-investment firms in this regard.
Although no confirmation on the matter is yet available, we expect investor focus to remain on updates pertaining to this issue going forward.
Impressive Price Performance
The buoyancy in the Genesee & Wyoming stock was not limited to May 23. Shares of the company have outperformed its industry in a year’s time. The stock has gained 20.2% compared with its industry’s 16.5% growth.
One-Year Price Performance
Zacks Rank & Key Pick
Genesee & Wyoming carries a Zacks Rank #3 (Hold). A better-ranked stock in the railroad space is CSX Corporation CSX, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CSX has an impressive history with respect to earnings surprise, having outperformed the Zacks Consensus Estimate in three of the last four quarters. The average beat is 10.3%.
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