Canadian Pacific Rail (CP.TO)

CN vs CP After a lousy 30-40 years, the rails now enjoy sustained demand, high barriers to entry and free cash flow that can pay down debt and raise dividends. He likes this industry. He owns CN.

He owns CNR-T over CP-T and CSX-Q in the US. CP-T is more grain and resource orientated -- East to West. CNR-T has more exposure to the US markets. He would hold if you own and wait for a pullback to buy more.

It could come under pressure with a commodities downturn. He would be more enthusiastic about jumping in if it was 15% lower. He feels the same about CNR-T

For the last three months, it's been in sidways consolidation, and before that it consolidated at a slightly lower level before it broke out to the upsside. There's still upside with CP. He owns a lot of CN and expects CP to also do well. (Analysts’ price target is $338.32)

(A Top Pick Feb 04/19, Up 16%) He swapped out to CNR-T. He is still in the space. The fact that rails have not 'come off the rails' is an endorsement that as long as we have economic headwinds, things are cooking along. You'll do well in either name a year from now.

CP-T earnings have improved with revenues up in all their businesses. He holds CNR-T instead. He would not buy more at these valuations. If you are playing the oil by rail strategy, he would prefer CNR-T as it has more incremental market opportunity as it ships south into the US. He is not adding adding to his position.

CN vs. CP CN, which he owns. It has more growth potential shipping north-south as opposed to east-west in CP. CP also has a cheaper valuation and is a little less dependent on the prices of commodities. Both perform in line though.

CN vs CP The major difference is CN-R goes more North-South into the US. CP-T goes more across Canada. Both trade with similar yields. He does not own either. Both are good for a long term investment. It is splitting hairs deciding on which one to have.