Canadian National R.R. (CNR.TO)

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.

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.

Stock didn't perform the way he wanted it to, he sold. Fundamentals weren't going in the right direction. Warned on earnings many times. Bought back stock with debt. Cashflow not strong. Stock's fallen a lot, could be interesting to a new buyer, as he's bullish on the stock and on rails long term.

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.

He holds CP, which has excellent management and the most unique footprint of any rail in NA. Tariff uncertainty impacts CP the most, but he decided to hold on and buy a bit more if it does get hit.

Chart for CP looks better and fundamentals work. When those 2 factors go hand in hand, it's quite compelling. CP has outperformed CNR.

The names on this list are plenty. Start with the industrials, for instance. He's a big fan of BBD.B, but they make everything here in Canada.

An aerospace name like CAE, the rails, auto components like LNR and MG.

Stunning appreciation over 10 years. CP is the better choice, cheaper on price to growth. Potential tariff headwinds right now. Trades ~19x 2025, yet only growing at 10.7%. Not for new $$. If you already own, keep, will be fine over time. Sell calls to cash in on higher stock price.

Overhang on this name and CP because of tariff talk and what that would do to the shipment of goods across the border, a potential headwind to watch. Add and hold for the next 10-30 years, as rails will continue to be an important mode of transportation across NA.

He buys rangebound stocks like one tranche at a time. He just bought one tranche of CNR, because it seemed oversold and is approaching support, but shares may be breaking down now. If this doesn't bounce soon, he will sell.

Enjoys a duopoly, so the market will always give this a high forward PE. But CNR is capital-intensive. Better to look at free cash flow as a metric. The current price will be okay if you buy and hold this long term. The dividend is low at 2.3%.

Excellent company with legacy assets that are impossible to replicate. Very strong business with good outlook. Would recommend buying and holding. 

Under $150 it's starting to get interesting. Can't go too wrong at these valuations, though a cheaper opportunity may arise in a recession.

Disconnect in terms of valuation and performance between CNR and CP is enticing. CP is trading a lot more expensively around 21-22x PE. Whereas CNR is trading more cheaply by comparison and by historical standards. Cyclical. Attractive dividend yield of over 2%.

Doesn't have a problem with it. But with the threat of tariffs, there might be a better opportunity elsewhere. See his Top Picks.

Would buy on this pullback. It enjoys an oligopoly, but the economy softened more than the company expected this year. The strike was also a headwind. Operations are doing well. CNR forecast that the goods market would be in a recession this year and they were right, so their comps may improve going forward if demand increases.