Canadian National R.R. (CNR.TO)

Most efficient railway in North America. Have roots going east and west as well as North and South, all the way to the Gulf Coast. More hinged to the US economy, which he thinks is important, then Canadian Pacific (CP-T). Good balance sheet. A billion dollars in free cash flow. Increased their dividend, 20% in 2011 and 15% this year and he expects a double-digit increase next year.

He is adding to new accounts as they come in. One of the hidden benefits is going to be the oil that is transported by rail. That business is not going to go away anytime soon because pipelines will take a while to build.

Stock has been dropping compared to Canadian Pacific (CP-T) and he doesn’t know why other than possibly people have been switching on the expectation that CP’s various ratios are going to improve. He still considers this one to be superior railroad.

16% of revenue is based on lumber and there is a pretty good movement on housing starts. This is also a low beta company. Great value. They are looking at doing a feasibility study for the Labrador trough (?). Also shipping some oil. Real good value, low risk play. 1.7% yield.

Very well run company. Has had a huge run so if you own, you never go too far wrong taking profits. However, given his general view of the market, he would tend to be patient and hold and then sell half at year-end. There is enough uncertainty in commodities that it might be a time to take some profits.

(Top Pick Oct. 05/11, Up 26.58%) Best run iron horse in North America. High return on equity. Ability to continue to grow the company and growth dividend right in Canada with growth in earnings. A well run company.

One of the dominant North American railways. The outlook for this company is based on the outlook for the North American economy. As the demand for export of resources, etc. continue and, in fact, will likely expand through the years, this company will do fairly well. Don’t expect to see a rate of return much beyond the growth of the economy plus the dividend.

Caller’s holdings have gotten to be more than 10% of her portfolio. Should she Sell some? His rule of thumb is when the weighting of a stock becomes double he automatically sells half and reallocates the money to his other holdings.

Rail stocks are highly dependent upon with what is going to happen with the economy. Feels transportation, excluding airlines, is a place to go. Extremely well-run company and is very popular in the US.

(Top Pick Aug 03/11, Up 30.78%) Will buy some with more new money and max holding is 5%. It has gotten expensive and will probably always be expensive. Dividend keeps going up. Friendly to shareholders. Wishes there were more companies like this in his portfolio.

Even though this stock is near its all-time high, he continues to buy this for new clients. Best run railroad in North America and one of the most profitable. Earnings continue to grow. If the US economy starts to pick up they are a big beneficiary.

It is very tough to recommend if you don’t own it. For longer term rails are a great investment over time. Economic activity drives them. 3 or 4 years out you will do well. Best run national railway in Canada. He got out of CP.

For a very short time this is fully priced but for longer-term hold, he is buying for his clients. Looking for the stock price to go up as they will be starting to ship oil by rail. Prefers this over Canadian Pacific (CP-T). Try to get at around $85.

Canadian National (CNR-T) or Canadian Pacific (CP-T)? He prefers CNR and their operating ratios. Have had a good upward move. These are both economy stocks. Yields on both are pretty skinny. Thinks they should go sideways a little bit before he steps in.

One of the best management teams in the country. Great company. Expensive stock right now. Would like to see the stock pull back to $85. 1.65% dividend.