Union Pacific Corp (UNP-N)

Her choice in the space. Better cost management, strong network efficiencies, favourable long-term profit trend.

Operating income in Q4 +5% to $2.5 billion. Was held back by tariff talks; tariffs will hurt, but they have room to move with better volume and pricing. He targets $275.

He sold UNP to buy Wabtec, because the former services only one geography while Wabtec goes everywhere.

His concern is its 18x forward PE. A railroad stock can grow only so much more than GDP. Pricing power is limited. He needs to see earnings outperform.

Transports haven't seen a tailwind lately. Has the sector bottomed? The timing is tough for transports now.

Been on a downtrend, though fairly priced. Earnings need to beat for shares to also rise. Trades at 18x forward PE and a PEG ratio of 1.7. A tailwind is US capex spending and all those materials that need transporting, like steel.

They just reported: revenues beat though flat for the year, costs are under control, and they beat earnings. Total volumes were up, including fertilizer up 15%, and industrial chemicals 7%. Their report was better than CSX, though guidance was guarded and mixed, including a muted first half of 2024. It's good to buy now.

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.

Performs well during strong economic environment.
Infrastructure spending in USA rising.
Union negotiations rising costs for company.
New CEO good for business.
Overall is a strong business for the long term investor.
Below $200/share a good place to buy.

Owns shares in company.
Good exposure to US economy.
NEW CEO good for business.
Steady company that is safe investment.
Current share price a good place to buy.
Expecting new highs in share price in 2024/25.

Attractive industry with strong, defensive attributes. Wait. We're coming into a time when there's potential for the economy to weaken, with a big impact on the rails. His preference is CP.

Great industry to be in with consolidation and pricing power. Environmentally friendly. Rails predict the economy. Numbers were down, so UNP anticipates deceleration in economy. All rails will do really well when we come out of the slowdown. He owns CNR.