Canadian National R.R. (CNR.TO)

Some of the rails in Canada have done extremely well until recently. They started to flat line and then fall. This one has fallen below its 200 day moving average, which signals that something is up with the stock. Thinks some of the rail shipments, in terms of volume, are a little bit lower than normal. He would wait to see where it goes.

Rails have done fairly well recently and have had a bit of a pullback. His preference would be Canadian Pacific (CP-T) as he feels that they may have more efficiencies that they can push through. Both companies are trading at the upper end of their valuation range. Both companies are controlled by the supply side of things, so he wouldn’t enter at this time.

The Canadian rails have certainly come off in the last little while. They’ve had a fantastic run. His view on this would be that you have time to wait.

Railways are great ways of playing the general recovery in the economy. With oil prices dropping they are not shipping as much oil by rail. He likes management at CP-T a little more. As long as you have a positive view on the economy he would be comfortable in either names but prefers CP-T.

When you have a strong economy, the rails are a place to be. He expects there is going to be a lot more oil moving by rail as the new Alberta Premier is not a fan of pipelines. If you have a long-term view, he would stay with the rails.

This is a terrific railway. A very well-run company. He is waiting for it to get a little bit cheaper. There is a little bit less crude going by rail now because of less activity, particularly in North Dakota. This is going to impact on the railways profits. It is a little expensive right now. He prefers CSX Corp. (CSX-N), which has less commodity exposure and more intermodal exposure.

Had sold his holdings and went into CSX (CSX-N), which is up about 11% this week on a story. CN is back to almost a market multiple, for the 1^st time in 4 years. Believes that this will go back to its recent high by year-end, giving the stock a 15%+ total return. Yield of 1.57%.

All the North American rail companies have struggled in the last 3-4 months. They all have different levels of intermodal and commodity businesses, but by and large it has been a weakening economic activity in the US. Thinks GDP growth is going to come back later in the year for both the US and Canada. Look for a really good entry point later this year on all of the rails.

Over the last few years, we have seen the rails do so well that he no longer owns any of them. This has underperformed Canadian Pacific (CP-T) recently, making it a somewhat better value. In the long run, rails can only grow as fast as the economy, although there are occasional areas of growth such as shipping oil by rail. If it got under $70, he would be looking at it.

A rock solid company. Trades at a premium and is rather expensive. He is watching it. Hold it and buy more if it goes down a lot. Don’t think about stop losses.

Canadian National (CNR-T) or Canadian Pacific (CP-T)? Given his positive outlook on the US and Canadian economy’s, rails are a great place to be looking 03-5 years. He has been buying this when it pulled back to $80. This is the cheaper of the 2.

Transportation tends to do quite well between January and about May. This one hasn’t done too much and is now in the process of rolling over. It is underperforming the market.

Harrison did for CP-T growth what he did when he was at CNR-T. Going forward they should perform similarly. He finds them expensive, however.

Just had a good quarter and that is going to be the best quarter they will have for the year.

Transports have had a little bit of pressure over the last little while. This and Canadian Pacific (CP-T) came with pretty good numbers considering. He would like to see this stock get turned around. It is trading below its 200 day moving average. Likes the rails in general.