Canadian Pacific Rail (CP.TO)

The rails have seen less crude by rail so have pulled back. Wait for the lows of early in the year to get in.

Unlike Canadian National Rail (CNR-T), this is a little bit more oversold on a daily basis. The chart shows a gap, and it could come down a little bit more. Hugging the 16 week low, which is really relevant.

Canadian National (CNR-T) or Canadian Pacific (CP-T)? Canadian railroads have done very well. This one has had a historic advantage because of the nature and the structure of their tracks. He prefers CSX Corp (CXS-N), which is trading at about a 20% discount to its Canadian competitors. He would look to some of the US rails instead.

It is a really good business. Generates very high levels of return. Does not know when hedge funds might sell this company. There may be some short term disruptions due to this. He does not see a lot of upside in it, but with volatility he would want to add to it (say a 25% pull back)

Likes both Canadian National (CNR-T) and Canadian Pacific (CP-T), but prefers this a little better. Feels the growth metrics for this are a little bit stronger and valuations are a little cheaper when looking at a PEG ratio analysis. Given the fact that they have both sold off quite a bit, especially CNR, he would be a buyer. These are good entry points.

Management has a great track record. Prefers CSX-T.

Stock has gotten a little bit ahead of itself. Transports have been great on lower oil prices. He sees $8.90 per share in earnings for 2014 and sees it going to $16.10 in 2017, but based on his 7%-8% revenue growth assumptions and the OR continuing to fall. If these targets are right, this should be a $300 stock in 2016.

Canadian National (CNR-T) or Canadian Pacific (CP-T)? He thinks both of these look a little bit rich as compared to other transportation companies. If he was in the sector, it would be something like FedEx (FDX-N) or UPS (UPS-N). Hunter Harrison seems to have done a phenomenal job of turning this around and is saying there is still a lot of operating leverage to take place, so if you have to pick one, he would probably go with this one.

(Market Call Minute.) This is expensive now and he prefers CXS (CSX-N).

There is a slowly improving market environment in North America. This company moves a lot of stuff. Transports are hitting a new high, which tells you the market believes the economy is slowly getting better. They are a big beneficiary of the lower energy prices.

Bailed out of the railroad stocks quite a while ago. This has risen on the basis of coming out of an operating ratio in the 70s, and is now down to the mid-60s. Comparing it to the much larger and more established Canadian National (CNR-T), you are paying much higher multiples for one that is being fixed, rather than the one that has worked all along.

Rails are both holds here. Very stretched valuation. You are looking at valuations on rails across North America being very stretched. Don’t add to the position. CSX is more attractive.

Thinks the multiple is around 35X PE. Likes the rails, but this one is really riding on a wave of enthusiasm, relating to an improvement on its various ratios. Should it ever miss a step along the way, the stock will take a good 10%-15% hit. He has basically moved any money he had in this, over to Canadian National (CNR-T), which trades at about 18X and isn’t under quite the same spotlight to meet objectives. Both companies are in good growth areas and both are benefiting from the transportation of oil. They have more business than they can almost really handle at this time. A good place to be in this kind of a growth economy.

Well-run company and continues to do well. He prefers Canadian National (CNR-T), which trades at a much lower multiple. Was not operating very well, but is certainly doing so now and that is the benefit. Doesn’t pay a very strong yield. A highly valued stock. The rail industry is in incredibly good shape. He would prefer something a little cheaper Such As Canadian National (CNR-T) or CSX (CSX-N).

Owns CNR-T. Both rails are priced for perfection. Will enjoy further earnings growth as the economy continues to improve. He would not rush in right here.