Canadian Pacific Rail (CP.TO)

Wait to buy when recession hits bottom.
Good company, but not at this price.
Expecting better time to purchase shares. 

Good long term investment. 
Post merger with Southern Pacific - company in a good spot.
Only railroad that connects USA/Canada/Mexico.
Strong legacy assets (hard to replicate).
Backbone of North American economy. 

Valuations are similar. CNR 200-day MA roughly sideways, the stock price is above that, average type of returns. CP's chart is fairly similar, but trending upwards a bit more. CP looks slightly better on technicals, so that's his choice.

Rail business in Canada is wonderful, much of it due to barriers to entry. Blue chip. Its transportation can't be outsourced the way manufacturing can. Acquisition has given it a more impressive footprint than CNR. CNR has a more attractive multiple. Both are good, high quality companies.

Rails are economically sensitive, so volumes will decline in a downturn. The merger with Kansas City was good, because it opens new markets for CP. Great synergies worth $200 million annually. But the rails are too expensive now. 

Likes the merger. Approval last month means it can pursue sizable synergies. Rails have all re-rated higher on improving margins and efficiencies. At 20x, trades at a premium to the group, but it's justified. Essential infrastructure, so performs well in a slowing economy.

CP is one of the best-managed railroads in North America and is now trading at 23x times' Forward P/E. 
The company has been growing and repurchasing shares consistently over the last few years, having a track record of growing EPS double digits, and one of the best operating metrics in the industry (ROIC, operating ratios, etc.). 
Based on consensus estimates, sales are expected to grow by 50% due to a combination with Kansas City Southern in 2023. 
And then later expects to grow their top line around 8% - 10% on average in the next five years. In addition, the management also guided that the combination of the two railroads will result in annualized synergies of US$1B in EBITDA over three years. 
Overall, a solid railroad name. 
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He'd do that trade, especially because in your RRIF there won't be tax consequences. Gives your portfolio more diversification. CP has more growth potential now with its wide network. Debt for KSU takeover is manageable, and they'll get cost savings. CP is at a cheaper multiple.

Pleased by approval of KSU acquisition. Shares popped last week. Synergies. Longer term, this completes its network nicely, right into the industrial heartland of Mexico. Even more important with de-globalization and near-shoring. An industrial, but one that tends to fare well in difficult economic times. Buy, hold, and keep.

Likes all transportation. Loves the rails and the charts. Can't go wrong with the rails and their massive moat. Higher highs and lows. Reaccelerating here. Industrials are among his favourites. Definitely add right here, right now.

In a pension fund, you want to have a rail because they're incredible businesses. Can you replicate this business? No. Extraordinary pricing power. CP now has the full continent and more upside than CNR. Would love to have a full position, but it's kind of expensive. He's waiting for a bad day to buy more.

CP just beat its last quarter and two of its previous three. CP is consistent and business is good. Last month, for example, CP shipped 2.29 million metric tonnes of grain, its most ever. Investing $500 million in new high-capacity cars is paying off. Read 3 Deep Value Stocks to Buy Now for our full analysis.

Canadian blue chip. Rails are magnificent businesses. Backbone and arteries of Canadian economy. Has done well during post-Covid rebound. Efficient way to move goods, relatively environmentally friendly. Proposed acquisition gives them a bigger footprint. Multiple stretched at 30x. Revisit after a pullback.