Stock price when the opinion was issued
Owns both, core holdings. No one's building any more rails. Cheaper to ship commodities by rail than any other way. If an economic slowdown, traffic and volumes will slow down but it's still a pretty steady business.
If the trade war goes on, everything gets more expensive and these two will be impacted negatively. But these events are always temporary. Trade wars are not good for inflation or the economy with US mid-term elections only 2 years away. He's trusting that rational minds will prevail.
As part of the CP/CNR oligopoly, it will always make money. Not even AI can make rails obsolete anytime soon. Very capital intensive -- operating costs, unionized workers, equipment. So FCF as percentage of revenue is not that amazing. Even with pullback today, still trades ~18-20x PE. Not overly expensive, but not cheap either.
Probably OK if you have a long-term view and want reasonable stability, grow as fast as the economy, get some efficiencies along the way, and collect the dividend. But it's not for him.
Critical piece of the supply chain. Still remains a dominant player in the vast network linking Canada and the US. Rough Q4 from labour strikes and extreme weather. Yield ~3.4%.
Stable, long-term asset, but facing margin headwinds from rising costs and lower productivity. Increased competition from CP-KSU merger.
Good idea. Together, CP and CNR have a duopoloy within Canada plus operations in the US. Rails have not performed that well this past year. Company guiding to high-single to double-digit topline growth. Tariffs won't impact directly, but risk is that economic slowdown would affect volumes. Trading ~18x forward PE, and wide discount to CP.