CSX Corp (CSX)

Stumbled a little because operating ratio stalled out around 70% instead of getting down to 60%. Feels the dividend is sustainable. Faced with headwinds because about 20% of their business is derived from coal shipments, which have really dried up. Have replaced a lot of that through other means, but they still have the offset of coal.

Rail sector is a good place to be involved in. Not his keen on this company’s overall assets, as compared to some of the others. His favourite is Norfolk Southern (NSC-N) followed by Union Pacific (UNP-N). The variation between individual rails isn’t that great. You can own any of these rails.

(A Top Pick March 26/13. Up 22.12%.) Have announced that weather will impact their 1^st quarter, but this affects all the rails. The stock didn’t go down so he takes this is a good sign. Has decent growth.

Has been one of his favourite railroads. Very solid management team. Stock had a big run, corrected and came back down to the 200 day moving average giving you a good opportunity to Buy. Thinks the coal headwind is understood but doesn’t mean there is not additional downside. If you believe that the US economy is going to continually grind forward over the next 2 years, this rail moves all kinds of housing related products, auto products and with a cheaper Cdn$ they bring lumber down from Canada.

(A Top Pick June 19/13. Up 13.4%.) An Eastern based railroad. There are 7 Class 1 railroads in the US. In spite of their struggling coal franchise, they have good growth from agriculture, the industrial side, oil and intermodal. They are committed to raising their dividend. Trading cheaper than some of the Canadian rails.

An industrial stock that does very well at this time of year. Chart shows a strong upper trend but has been in the trading pattern for the last little while. Seasonality is positive this time of year, right through until the middle of April. As you get close to the middle of April, you may want to re-examine it.

Last earnings report was kind of disappointing. Operating ratio sort of stalled out and in fact moved up a little bit. Had a program to bring it down from the mid-$70 to the mid-$60. Currently around $71-$72. Coal is still going to be a drag on their returns. The intermodal and industrial side of their business is doing well.

Comparing other railroads, it looks very attractive. Along with its competitor Norfolk Southern (NSC-N), it still has a lot of coal headwinds, which is a big part of their business. Did a very good job of offsetting this with growth in other parts. Automotive and intermodal have been strong. Thinks there is decent upside here but is coming to the higher end of its valuations.

Likes this. This is sort of the core of the industrial expansion that we are seeing in the US. They ship everything from automobiles to chemicals, intermodal, groceries, etc. Want to bring their operating ratio down to 65%, which he believes is currently below 70%. Increasing their margins and offsetting the hit they took on coal. Well priced.

(Top Pick Jan 14/13, Up 40.05%) They had too much exposure to coal but the other stuff has more than made up for it. Widening of Panama Canal will be very beneficial and should boost their earnings over the next few years. That will be a growth driver in 2015/16.

Railways are a really good sector to invest in. Have unique assets that are very tough to replicate. His favourite in the sector is Norfolk Southern (NSC-N). Most of them are trading at 52-week highs.

This railway had the biggest exposure to coal. There has really been a slowdown in coal production and shipments, so the company had some fairly significant damage. Recently the whole sector has tended to trade off a little bit. He prefers Union Pacific (UNP-N) whose volumes are more diversified. As a category, these railways are not cheap but they tend to reward shareholders every year with a dividend increase.

(Market Call Minute.) Suffered a little bit because of coal shipments, but have more than made up with intermodal, chemicals and the auto business. Bringing their operating ratio down.

Likes the rail business as it has consolidated over the last 5-6 years. Have taken out a lot of costs and made a lot of acquisitions, which has really helped. It had a great run, so if you own, he would consider taking some off the table.

(A Top Pick July 12/13. Up 8.54%.) Believes the US recovery is going to continue and is going to be slow and grinding. This is one of the best managed rail companies. Moves everything from fertilizer to furniture to cars, so it is leveraged to the recovery theme. It will do crude by rail, so benefits from the shale plays. Probably the cheapest in the rail group. Still a Buy.