PTC technology will automatically stop the train if a conductor misses its stop signal, coming in light of a 2008 train collision which killed 25 people.

This could possibly add 25% to CSX's free cash flow, which at these levels would make CSX and other rail companies undervalued by these metrics.

Jason is a co-founder of Benzinga.com.

All Aboard the Rails originally appeared on BloggingStocks on Mon, 07 Mar 2011 00:40:00 EST. Please see our terms for use of feeds.

Continue reading Has Union Pacific Topped at $100?

Has Union Pacific Topped at $100? originally appeared on BloggingStocks on Wed, 02 Feb 2011 17:00:00 EST. Please see our terms for use of feeds.

Can you believe this? Railroad company Norfolk Southern has issued a 100-year bond with an interest rate of only 5.95%. In other words, you would be buying a 100-year bond without the slightest clue about will happen in the next 100 years in the railroad industry -- or in the world.

Nevertheless, Norfolk Southern (NSC) has raised $250 million in bond sales, more than double the $100-million minimum originally announced. Norfolk is believed to have gotten the lowest rate possible for its bonds.

Meanwhile, the 30-year U.S. treasury bond yields have dropped to their lowest level ever -- 3.65%.

Continue reading Would You Invest in a 100-Year Bond?

Would You Invest in a 100-Year Bond? originally appeared on BloggingStocks on Tue, 24 Aug 2010 09:30:00 EST. Please see our terms for use of feeds.

Continue reading CSX First Quarter Earnings Preview

CSX First Quarter Earnings Preview originally appeared on BloggingStocks on Tue, 13 Apr 2010 10:00:00 EST. Please see our terms for use of feeds.

Continue reading Railroads Traffic Indicates Rebound, but Not Recovery

Railroads Traffic Indicates Rebound, but Not Recovery originally appeared on BloggingStocks on Fri, 09 Apr 2010 16:00:00 EST. Please see our terms for use of feeds.

Continue reading Berkshire Hathaway buying Burlinton Northern Santa Fe

Berkshire Hathaway buying Burlinton Northern Santa Fe originally appeared on BloggingStocks on Tue, 03 Nov 2009 09:30:00 EST. Please see our terms for use of feeds.

Continue reading CSX: Another railroad at a bargain price

CSX: Another railroad at a bargain price originally appeared on BloggingStocks on Fri, 01 May 2009 16:30:00 EST. Please see our terms for use of feeds.

Continue reading Canadian Pacific: Northern runs, northern profits

Canadian Pacific: Northern runs, northern profits originally appeared on BloggingStocks on Fri, 01 May 2009 12:00:00 EST. Please see our terms for use of feeds.

Continue reading Time to scoop up a few shares of Norfolk Southern

Time to scoop up a few shares of Norfolk Southern originally appeared on BloggingStocks on Thu, 30 Apr 2009 17:30:00 EST. Please see our terms for use of feeds.

CSX (NYSE: CSX), a railway company whose colleagues include Burlington Northern Santa Fe (NYSE: BNI), Norfolk Southern Corp. (NYSE: NSC) and Union Pacific Corp. (NYSE: UNP), issued its Q1 report on Tuesday after the bell. As one might imagine, there was a drop in both sales and net income. The top line declined by 17%. The bottom line, on an adjusted basis (taking into account an item from last year's similar quarter), dropped 23% to $0.62 per share.

The economy is still taking its toll, obviously. Volumes were down during the quarter. However, the market sometimes cares about only one thing: beating expectations. CSX actually beat the analyst expectations of $0.51 per share. This significant difference led traders to push shares of CSX higher by 6.5% during Tuesday's after-hours session.

Continue reading CSX's earnings engine was powerful in Q1

CSX's earnings engine was powerful in Q1 originally appeared on BloggingStocks on Wed, 15 Apr 2009 09:00:00 EST. Please see our terms for use of feeds.

Continue reading Time to get on board UNP

Time to get on board UNP originally appeared on BloggingStocks on Fri, 27 Mar 2009 17:30:00 EST. Please see our terms for use of feeds.

This post is part of a series featuring bargain stocks that are worth a look now. See more Cheap Stocks.

Maybe a railroad stock doesn't exactly seem like the cutting edge in investments. In fact, it might even strike you as old-timey. Fair enough -- but if you check out the year-to-date performance of Burlington Northern Santa Fe (NYSE: BNI), it's hard not to be impressed. At the end of November, the stock was down just 8% for 2008, compared to a loss of 40% for the broader S&P 500 Index (SPX).

The Texas-based freight firm transports everything from lumber and coal products to canned goods and oats. While you may have a perception of trains as pollution-spewing dinosaurs, BNI happily defies those stereotypes. Not only is the company adding new rail lines, it has also recently won accolades for its environmentally friendly practices. (Environmentally friendly for a railroad, of course -- I won't kid you by saying these locomotives run on rainbows and happy thoughts.)

On the fundamental front, BNI reported third-quarter earnings in late October that crushed analysts' expectations, and offered a rosy forecast for the fourth quarter. CEO Matt Rose said he's optimistic about his company's future, despite macroeconomic uncertainty. A pullback in corporate spending could actually benefit BNI, says Rose, because it's cheaper to transport goods by rail than by truck. "As the economy slows down, customers are going to be paying a lot more attention to cost," noted the chief executive.

Continue reading Cheap Stocks: Burlington Northern Santa Fe

Cheap Stocks: Burlington Northern Santa Fe originally appeared on BloggingStocks on Fri, 05 Dec 2008 16:50:00 EST. Please see our terms for use of feeds.

• Mass transit: We're early into the $4 gas era, of course, but initial U.S. Department of Transportation data indicates Americans are driving less and using mass transit more. The trouble is, many mass transit systems (rail, commuter rail, subway, bus) need to be expanded/upgraded to handle the increased ridership. Bigger, better mass transit systems will save the United States hundreds of billions of dollars in oil costs, not to mention the environmental benefits.

Continue reading Transportation issues will be critical to the health of 21st century U.S. economy

Transportation issues will be critical to the health of 21st century U.S. economy originally appeared on BloggingStocks on Thu, 07 Aug 2008 16:21:00 EST. Please see our terms for use of feeds.

Fab Five: 5 promising stocks for patient investors originally appeared on BloggingStocks on Thu, 05 Jun 2008 14:50:00 EST. Please see our terms for use of feeds.

Readers of this space know that one of the preferred sectors is the railroad sector. The once near-rust-belt level sector has experienced a revival at the start of the globalization age, and compelling economic trends document the commerce-based underpinnings of this revival.

Most transportation officials agree that the U.S. transportation infrastructure -- highways, roads, bridges, mass transit systems -- is in need of a major upgrade in order to meet the nation's vehicle transportation needs of the 21st century.

The nation's public officials will begin to address the above concern in the years ahead, as public funds become available, but until they do, and due to crude oil's sustained high price, an opportunity has emerged for another transportation form: you guessed it, the railroads. And Norfolk Southern (NYSE: NSC) is a railroad worth an evaluation.

Norfolk Southern provides rail transportation in the eastern United States, operating a 21,000-mile rail network in the eastern United States and Canada. It's an elaborate intermodal and coal service network that also has a large freight business.

Continue reading Norfolk Southern: In the era of record oil prices, the railroads are roaring

Norfolk Southern: In the era of record oil prices, the railroads are roaring originally appeared on BloggingStocks on Sat, 31 May 2008 14:10:00 EST. Please see our terms for use of feeds.

Continue reading As wider audience discovers U.S. railroads, perhaps you should, too

As wider audience discovers U.S. railroads, perhaps you should, too originally appeared on BloggingStocks on Mon, 21 Apr 2008 17:44:00 EST. Please see our terms for use of feeds.

As Congressional Democrats and Bush Administration officials evaluate additional legislative ideas aimed at further stimulating the anemic U.S. economy, one proposal that could gain more traction in the months ahead concerns domestic infrastructure.

The consensus among economists is that the first economic stimulus package will provide only a modest boost (at best) to the U.S. economy, economist David H. Wang told BloggingStocks Tuesday. Further, if many Americans choose to save or invest their $300-$1200 tax rebate, instead of spending it or using it to pay down debt, the stimulus effect will be even less than projected.

That would leave the U.S. economy with a correcting housing sector, record-high oil prices (oil topped $113 per barrel Wednesday), a contracting job sector, an investment banking sector largely seeking to rebuild balance sheets and not lend money, and rising living costs weighing on consumer spending. In other words, Wang said, all of the classic U.S. growth engines, except exports, are likely to serve as contractionary forces through at least the first half of 2008, and most likely for considerably longer.

Continue reading Federal infrastructure spending could gain traction if U.S. recession lingers

Federal infrastructure spending could gain traction if U.S. recession lingers originally appeared on BloggingStocks on Tue, 15 Apr 2008 14:40:00 EST. Please see our terms for use of feeds.

With 32,000 miles of track in the western U.S. and two Canadian provinces, Burlington Northern accounts for about 45% of the west's traffic and about 23% of U.S. rail traffic.

Analysts see 2008 revenue growth of about 6-8%, down from double-digit growth a year earlier, but still healthy. Margins should remain solid, with modest pricing power. The Reuters F2008/F2009 EPS consensus estimates for BNI are $5.92/$6.81.

Even better: like the three other major U.S. railroads, BNI is in a relative sweet spot until the United States determines its energy policy for the 21st century. Or should one say 'if the United States determines its energy policy for the 21st century.' Investors will carefully note that the value Wall Street attaches to rail stocks pretty much mirrors the price of oil's ascent, due to the higher truck transportation costs implied by a higher price of oil.

Continue reading Burlington Northern (BNI) is the transportation sweet spot

Burlington Northern (BNI) is the transportation sweet spot originally appeared on BloggingStocks on Tue, 01 Apr 2008 15:48:00 EST. Please see our terms for use of feeds.

Readers of this space know that the railroad sector is one of the preferred sectors. After decades of unconscionable neglect, U.S. railroads are experiencing a resurgence, propelled by international trade and the rail's cost advantage over truck transport. But as one knows, trains don't always roll, sometimes they have to brake to stop, and that's where Westinghouse Air Brake Technology makes its money.

Westinghouse Air Brake Technologies (NYSE: WAB), known as Wabtec, manufactures braking equipment and other parts for locomotives, freight cars, and passenger rail cars.

Products of Wabtec's freight group include air brake systems, draft gears, hand brakes, slack adjusters, heat exchanges, railroad electronics, and monitoring and control equipment. The company also builds new locomotives up to 4,000 horsepower and provides aftermarket services, including locomotive and freight car fleet maintenance.

Analysts expect strong, double-digit revenue growth on solid back-orders and new business. Analysts also like Wabtec's blue-chip clientele, decent pricing power, demonstrated ability to deliver products and services on time, and reasonable cost structure. The Reuters F2008/F2009 EPS consensus estimates for WAB are $2.53/$2.81.

Continue reading Wabtec: More powerful than a locomotive

Wabtec: More powerful than a locomotive originally appeared on BloggingStocks on Sat, 23 Feb 2008 08:40:00 EST. Please see our terms for use of feeds.

Railroad giant Norfolk Southern Corporation (NYSE: NSC) was up 10% in just the last week, based in large measure on super 4Q and FY2007 earnings released a week ago, January 22. Fourth quarter operating revenue increased 6% to $2.5 billion, and net income increased 4% to $399 million. What makes these numbers even more impressive is that Norfolk Southern posted revenue increases at the same time it faced significantly higher fuel costs and a measurable reduction in shipments by volume. Coal shipments dropped 2% by volume, while general merchandise shipments dropped a hefty 10% by volume.

The story is the same for FY2007 results. Revenue increased while shipments by volume decreased. And the railroad still made money. The stock closed at $45.07 on January 21, but closed at $52.00 on January 28. Very nice capital appreciation for a week. The company increased its dividend payout by 12% to $0.29 per share, a 32% increase over the last year, and the 102nd consecutive quarter of dividend payout. Clearly, Norfolk Southern is a stock for the very long haul.

Continue reading A tale of two railroads (NSC) (CNI)

A tale of two railroads (NSC) (CNI) originally appeared on BloggingStocks on Tue, 29 Jan 2008 11:37:00 EST. Please see our terms for use of feeds.