Canadian National R.R. (CNR.TO)

Likes it. Don’t buy it here but it has nothing to do with the derailment this past weekend. It has to do with overall valuation. He wants to see it at $95-100 before buying. The rails will continue to benefit from the US economy.

(Top Pick Oct 4/12, Up 25.38% total return) A great investment. Fits all his requirements. Dividend keeps growing and operating business keeps getting better and better. It is still the most efficient in North America. It goes across Canada and down to the Gulf Coast.

Continues to buy for new clients. Lately CN is winning business back from CP because they continue to execute better than anyone in North America. Good operation in the US and the economy is helping them a lot. The only rail he holds.

(Market Call Minute.) Valuations are still relatively high. Watch out for the earnings this quarter.

Sees EPS growing 12% over the next 3 years. Trading at not a bad valuation at around 14.5 for 2014. There might be a little pause this quarter due to weakness in coal and grain. He would use any sort of weakness to build a position.

Really likes the pattern. It has built a good top. Sees earnings growth coming out of the oil shipments side and there is a pretty reasonable economy in Western Canada with a bumper crop, which means more grain shipments, and probably more fertilizer. Great growth potential. Reasonable multiple, especially compared to Canadian Pacific (CP-T).

(Market Call Minute.) Likes this one for the-North-South access that they provide between Canada, US and Mexico.

Likes this very much and likes the rails going forward. Having a pause here only because there is some doubt about the economy. The counter to that is the increased shipment of oil.

(Market Call Minute.) Prefers US rails such as CSX (CSX-N).

Canadian National (CNR-T) versus CSX Corp (CSX-N)? Likes the rail industry generally because of the economic sensitivity. As the US economy picks up, goods have to be moved. This one has a big operation in the US. Not as much commodity in the US as some of the other rails. The most profitable and best run railroad in North America.

Pretty fully valued. Prefers CSX Corp. (CSX-N) who, although they have exposure to coal, you can buy for 12X earnings, not 18 times earnings. Similar yield and the valuation is so much cheaper. Exposed to the eastern seaboard in the US so it is not that much different from Canadian National.

Feels that both Canadian rails have moved quite well and are probably overpriced, especially when compared to some of the US rails. Closer to $95 would be an entry point.

Likes the shipment of oil by rail and doesn’t think that what happened in Québec is going to affect shipments at all. Has significant trackage in the US. Good operator. PE of 17.25%. Yield of 1.65%.

Certainly not nearly as overvalued as Canadian Pacific (CP-T). If he were to choose between the 2, it would certainly be CN. More and more oil transportation has been a boon for both companies. At 15X next year’s earnings, it is not dirt cheap. You are not going to get a lot of multiple expansion but you could still get some earnings growth out into next year as well.

Sensitive to the US economy because of its Illinois Central holdings. Likes the prospects for the US economy. Sees growth in traffic and they are going to be a major beneficiary. Dividend yield of 1.71%.