Canadian Pacific Rail (CP-T)

Prefers CNR on valuation. Lots of embedded synergies after the KSU acquisition, and if they don't meet targets the high valuation makes it vulnerable (especially in this market).

Very narrow trading range over last 5 years. Bought KSU 2-3 years ago, yet still in the trading range. Headwind from trade issues. Its network should be fantastic once the trade deals are settled. Pulled back guidance for the year to low double-digit EPS growth. Longer term, should see high single-digit revenue growth.

The trade deals will get done. Goods still need to be shipped. He's positive on it.

Are hurt by the trade war; volumes will decline. CP is more exposed to cars crossing the US border. Buying KC was a great strategy. The rails have never been this cheap, so this will do well in 5 years. Just painful to hold now. A quality company with strong pricing power. 

Negatively impacted by trade. Economically sensitive. Likes the business. With its broad North American footprint, likes it better than CNR. More earnings upside from cost-cutting from KSU acquisition. Margins and cashflow are great for the rails. Constructive longer term, once tariff issues get sorted. Wait for more weakness.

CP has more catalysts from the Kansas City merger, and a better growth rate. Both are getting more attractive. If we get the all clear on the economy, both names will be decent entry points. Though optimistic, he's still a bit afraid, and wouldn't step in just yet.

Owns both, core holdings. No one's building any more rails. Cheaper to ship commodities by rail than any other way. If an economic slowdown, traffic and volumes will slow down but it's still a pretty steady business. 

If the trade war goes on, everything gets more expensive and these two will be impacted negatively. But these events are always temporary. Trade wars are not good for inflation or the economy with US mid-term elections only 2 years away. He's trusting that rational minds will prevail.

Owned this years ago and should have hung on. Looking to get back into rails (possibly this name), hoping for a correction because of tariffs, but the market's too smart.

Its main business is a great one and they have sold off their non-core assets. At 23X earnings it trades at a premium to the sector. The buying of the Kansas City line gives them a franchise from Canada to Mexico. It is good to buy for the long term as well as CN Rail.

Good idea. She owns CNR. Together, CP and CNR have a duopoloy within Canada plus operations in the US. Rails have not performed that well this past year. Tariffs won't impact directly, but risk is that economic slowdown would affect volumes. CNR trades ~18x forward PE, and wide discount to CP, so she'd pick CNR.

First-class management. Most unique footprint of any rail in NA. Tariff uncertainty impacts it the most, as it facilitates trade among US, Canada, and Mexico. It's held in really well. Attractive 20x PE, but tariffs will impact growth.

He did think about exiting, as he looked out over 4 years and saw potential economic weakness on the horizon. But it's a trophy asset, one to own long term. He decided to hold on, and to buy a bit more if it does get hit.

Chart looks better and fundamentals work. When those 2 factors go hand in hand, it's quite compelling. Has outperformed CNR.

Cheaper on price to growth than CNR. 

High quality, stock's done reasonably well. Overhang on this name and CNR because of tariff talk and what that would do to the shipment of goods across the border, a potential headwind to watch. Strong dividend. Add and hold for the next 10-30 years, as rails will continue to be an important mode of transportation across NA.

He doesn't own this, but CNR, and CP is the better bet. CP is now bouncing off a long-term trend line of support. There was a support around $105 in 2024.

Attractive entry point. US rhetoric on tariffs has put a negative cloud on North American trade. The only North American rail network. Hit hard, down 15% from its high. Great management team. Such a unique asset, you want to take advantage of the weakness right now. Yield is 1%.