Canadian Pacific Rail (CP.TO)

Sounds as though the amalgamation is going well. The benefit is that the network now goes North-South, East-West. He owns CNR instead. 

Under pressure, but his view is longer term. Assets are irreplaceable. Overall, should grow with the economy and increase prices. Synergies from merger will last a long time. It will take longer, but eventually a NA powerhouse.

Owns shares in business. Excellent business with legacy assets. Mexico to Canadian railway valuable. Good at capital allocation. Strong investment for long term investors. 

It's in the public interest to get this pipeline going, as it will be great for Canadian energy producers as a whole. Won't have a negative impact on the rails. Rail is not the most efficient for shipping oil, it's the overflow option. 

He's positive on CNR and CP, more so on CP with its unique footprint integrating Canada-US-Mexico. Between onshoring and its management team, going to do quite well. Trades at a premium because of this.

Rails depend on overall economic activity. Rates will probably produce at least a temporary slowdown in economic growth. Price has come off. Next cycle could be 3-7 years from now. Starting to look attractive, good time to look at where you might pick it up. He hasn't jumped in yet. Kansas City acquisition makes it more competitive.

Great acquisition of Kansas City by CP was a game changer. CNR is the gold standard in North America. US is not in a recession yet, but if it does happen, all the rails will get cheaper. Don't settle for just a 1% differential from the historical average, when you might be able to get it 20% cheaper.

He prefers trucking, though CP now has an integrated network across North America after the KC deal. But the consumer sector is less robust now. CP is probably good medium/long-term, but will lag short-term.

It is a cyclical stock and he sees a pullback in the economy. There may not be even a soft landing so rates could still rise. He is not keen on railway stocks.

CP PEG is almost even at 1.0, so it's the best value. Though he likes this one, this is the one he'd trim in his portfolio if he were absolutely forced to.

Yes, and certainly on any pullback. Great company. Merger will benefit in the long run, synergies haven't started yet. Those new assets are why he prefers it to CNR. Long term, it will be one of the best railroads you can own.

It's still in an uptrend though there's been some consolidating. It has to take out the high of late 2022 before you buy. The chart isn't bad.

He likes the oligopoly-type names with few competitors. #2 market cap in the industry. Robust network connecting key markets. Acquisition lets them grow further. Strong management, highly committed to profitability. Steady margin improvement. Rising demand for freight services. Slow and steady, outperformed the TSX for decades. Yield is 0.68%.

It is doing well. The Kansas City acquisition was expensive, He prefers CN which has a lower valuation and more upside over the 2 to 3 years.

Attractive industry with strong, defensive attributes. Coming into a time when there's potential for the economy to weaken, with a big impact on the rails. His preference in the space because of footprint and recent acquisition. Very attractive. Long term, onshoring is a benefit. Well run. Wait, buy on pullback.

Very strong company with duopoly business model.
High value infrastructure assets.
Has outperformed S&P 500 index.
Excellent company to own long term.