Hap (Robert) Sneddon FCSI Norfolk Southern NSC-N WAIT Mar 16, 2016

It looks less and less like the merger with Canadian Pacific (CP-T) is going to go through. The customer backlash against this is pretty strong. He would buy this on the basis of the fundamentals, not on the potential deal going through. He would rather own Canadian Pacific.

The rail space has seen a great run on the back of part of a Trump rally as well as the head winds from last year rolling over. She held CSX, but sold in the last few weeks on this rally. Last time we had a really big pickup in volume we saw a reduction in margins so she took money off the table.

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.

Last week, they reported a stinker of a quarter: railway operating revenues -5% YOY, income from rail operations -32% and EPS -17%.

In February 2023, they had a horrifying derailment in Ohio. Last month, a proxy contest was launched by an activist investor holding $1 billion of shares, very critical of management to get their operating ratio down shareholder. NSC lags its peers the past year. 

He likes to buy the rails on dips, but not this now. They paid a settlement on a derailment, but their quarter remained down in sales and earnings.