What Happened When Alex Kenjeev Paid His Student Loan in Cash
Facebook's IPO Debacle, Day 3: Un-Friended and Dis-Liked on Wall…
The rails will play a pivotal role in both containerized and commodity transport, moving forward, with a cost advantage over trucking, particularly if oil prices remain elevated. But will oil prices moderate in 2010? As they say in The Bronx, N.Y. 'Good luck waiting for that one to happen!' And that's a big reason I'm reiterating my buy rating for Canadian National Railway (CNI), first recommended on July 30, 2009 at a price of $47.95. CNI's long-term valuation story remains intact: look for 5-8% revenue growth in FY2010, as both goods shipment and commodity transport recover; margins will likely increase this year, as well.
Further, signs of growth in the fertilizers and coal provide additional evidence that the global economic recovery is strengthening. Another positive: CNI is an efficient railroad, with strong cost controls. The First Call FY2009/FY2010 EPS estimates for CNI are $2.96 to $3.52. That $3.52 FY2010 EPS estimate will likely prove to be low.
Technically, Canadian National's stock chart is strong -- an uptrend, but it nevertheless features above-average volatility. Also, the stock has recently dipped below the key, 50-day moving average: if it remains below the 50-day MA, that would be concern, but most likely it won't. Hence, view the pull-back as a buy opportunity.
2010 Outlook: Canadian National Railway is a long-term play, but if you're looking to sell CNI within the year, take your profits after it rises to $63-64, if it fails to clear $65.
Stock Analysis: Canadian National Railway is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in CNI now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your CNI position before March 2010. Sell/Stop Loss if you were to buy shares in this company: $23.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
Technically, Canadian National's stock chart is strong -- an uptrend, but it nevertheless features above-average volatility. Also, the stock has recently dipped below the key, 50-day moving average: if it remains below the 50-day MA, that would be concern, but most likely it won't. Hence, view the pull-back as a buy opportunity.
2010 Outlook: Canadian National Railway is a long-term play, but if you're looking to sell CNI within the year, take your profits after it rises to $63-64, if it fails to clear $65.
Stock Analysis: Canadian National Railway is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in CNI now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your CNI position before March 2010. Sell/Stop Loss if you were to buy shares in this company: $23.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
