"Burlington Northern is my preferred choice in the railroad industry. At first glance, Burlington Northern had a particularly bad first quarter.

"Profit was $0.86 a share, down sharply from $1.30 a share the year before. However, when unusual items such as an unfavourable coal rate decision are excluded, operating earnings amounted to a much more acceptable $1.13 a share, well above the 96c analysts were looking for.

Continue reading Burlington Northern (BNI): On the right track

Burlington Northern (BNI): On the right track originally appeared on BloggingStocks on Fri, 22 May 2009 15:00:00 EST. Please see our terms for use of feeds.

After the airline went through bankruptcy twice, turnaround expert George Putnam now sees improving long-term prospects for US Airways (NYSE: LCC).

In his The Turnaround Letter, the advisor suggests, "When travel does begin to pick up again, US Air with its lean cost structure should profit handsomely." Here's his review.

"US Airways began in 1939 as All-American Airways delivering mail to Western Pennsylvania and the Ohio Valley; from there it grew through acquisitions to be a major national airline.

Continue reading Turnaround expert: Blue skies for US Airways (LCC)?

Turnaround expert: Blue skies for US Airways (LCC)? originally appeared on BloggingStocks on Tue, 19 May 2009 10:40:00 EST. Please see our terms for use of feeds.

"It's hard to find any good news these days but I was pleasantly surprised with the third-quarter railway results, as almost all of the 'class 1 carriers' reported better than expected earnings," notes analyst Tom Slee.

The contributing editor to Gordon Pape's Internet Wealth Builder explains, "Several rail stocks are starting to look attractive at these depressed levels and Burlington Northern (NYSE: BNI) remains my preferred choice in the group." Here's his outlook.

"Even with the economic downturn starting to bite, reduced fuel costs and increased freight rates offset lower volumes. Equally important, the companies remain cautiously optimistic despite the miserable outlook.

"They are confident that further freight rate price increases in the 4% to 5% range are sustainable and will still allow them to undercut inefficient truckers.

"Unfortunately, none of this prevented the stocks from being battered during the market collapse. However, I think that fourth-quarter profits are likely to remain strong and the longer term outlook for railroads remains favorable.

"Burlington Northern continues to power ahead. A shrinking economy must eventually take its toll but there was no sign of any weakness in BNI's third-quarter results. Operating earnings came in at $1.91 a share, up 29% from $1.48 in 2007.

Continue reading Burlington Northern (BNI): On the right track

Burlington Northern (BNI): On the right track originally appeared on BloggingStocks on Thu, 11 Dec 2008 10:10:00 EST. Please see our terms for use of feeds.

"Railroads are a play on three big secular themes: the drive for increased energy efficiency, growth in coal and the agriculture boom," says Elliott Gue, a energy sector expert who has just returned from Japan where he was covering the G8 Summit.

Meanwhile, in his The Energy Srategist, he states, "Railroads are now among the most fuel-efficient forms of freight transport available." Here, he offers a bullish review of Union Pacific (NYSE: UNP).

"My long-held thesis on the group has been that the railroads are no longer totally dependent on the US economy for their growth.

"It's no longer appropriate to look at this sector as viciously economy sensitive. The traditional relationship between the broader market and the rails has been breaking down for several years, but this trend appears to be accelerating.

"In 2007, according to the Association of American Railroads (AAR), the average railroad moved a ton of freight a distance of 436 miles on a single gallon of diesel fuel. That makes freight trains roughly three to four times more fuel efficient than trucks.

"Union Pacific is the largest railroad in the US and has long been one of my favorites. The company's network is nearly 33,000 miles long and is concentrated in the West and Midwest. It also offers a convenient example of the bullish forces at work for the rails, particularly in the coal and agriculture industries.

Continue reading Union Pacific (UNP): 'Railroad renaissance'

Union Pacific (UNP): 'Railroad renaissance' originally appeared on BloggingStocks on Thu, 17 Jul 2008 12:58:00 EST. Please see our terms for use of feeds.

"The railroad sector is one of the few reliable groups in today's market; with solid pricing power, these companies have a solid future moving forward," says contrarian Chris Johnson.

"We are adding CSX Corp. (NYSE: CSX) as a long position to the Insightful Investor portfolio. Here's his look at the stock, and an options play for those seeking leverage.

"Last week, our Earnings Tip Sheet highlighted CSX as a bullish pick ahead of earnings. The stock was positioned for a jump according to our Behavioral Valuation approach. One week and a positive earnings report later, we're looking to increase our exposure to the company.

"CSX has now reported earnings results that handily beat both the analyst forecast and the whisper number. The company overcame softness in some sectors through increased shipments in ethanol and grain as well as increased foreign demand for coal.

"Rail companies appear strong moving forward, given that rising crude oil prices are forcing companies to use more cost-efficient means to ship their goods.

"What's more, CSX was the first of the 'big four' rail companies to report earnings. The company should thus benefit from positive reports when its competitors enter the earnings confessional.

Continue reading Riding the rails with CSX Corp. (CSX)

Riding the rails with CSX Corp. (CSX) originally appeared on BloggingStocks on Mon, 28 Apr 2008 12:25:00 EST. Please see our terms for use of feeds.

With Warren Buffett in the news recently, it is timely to look at a recent report from Paul Tracy, highlighting some of the best-positioned stocks currently held by Berkshire Hathaway (NYSE: BRK.A) -- Burlington Northern Santa Fe (NYSE: BNI) and WABCO Holdings (NYSE: WBC).

Here, the editor of StreetAuthority Market Advisor explains, "Buffett looks for such factors as intrinsic value, low debt, managerial expertise, a margin of safety and an 'economic moats' that offers some sort of sustainable competitive advantage." Here's a pair of transportation stocks that fit the bill.

"While many investors fret over the current volatility in the stock market, Warren Buffett is likely busy looking for value. Historically, in volatile up and down markets, Buffett has found even more opportunities than in raging bull markets."

"Burlington Northern Santa Fe is the second-largest railroad in the U.S. Berkshire holds an 18.2% stake in BNI, recently boosting that stake by purchasing 11 million shares to bring its total ownership to more than 63 million shares. Buffett has made no secret of his desire to purchase more of the stock.

"The key to discerning competitive advantages between the major railroad firms lies in the strategic location
of their networks. Specifically, BNI has the largest network of track in a region of the western U.S.
known as the Powder River Basin, which is home to America's largest reserves of coal.

Continue reading Rails and trucks: A look at two Buffett stocks

Rails and trucks: A look at two Buffett stocks originally appeared on BloggingStocks on Wed, 20 Feb 2008 11:38:00 EST. Please see our terms for use of feeds.