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Rail carloadings for agriculture and coal are down, as is containerized trade traffic, and the near-term does not look bright, but you'd never know it from Burlington Northern Santa Fe's stock price trend. Institutional investors have bid-up shares in anticipation of U.S./global recoveries. Therefore, I'm reiterating my Buy rating for Burlington Northern (NYSE: BNI), first recommended on April 30, 2009 at a price of $67.81. However, there is caveat: wait for a pull-back to about $75, and hope the market gives you the chance at a decent entry point.
Longer-term, the future for BNI is bright: it will remain a key player in intermodal transport, as well as in long-haul coal and grain. The First Call FY2009/FY2010 EPS estimates for BNI are $4.96 to $5.61. Note - Revised Sell/Stop Loss: $44.
Stock Analysis: Burlington Northern is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in BNI on a pull-pack to about $75. Under any circumstance, don't buy more than 75% of your BNI position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $44.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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