Members Login
Username 
 
Password 
    Remember Me  
Post Info TOPIC: CP is a Train Wreck Waiting to Happen.


Barely a pulse...

Status: Online
Posts: 2392
Date:
CP is a Train Wreck Waiting to Happen.
Permalink  
 


The stock is running to all time highs, trading at $157 a share and putting a market capitalization of 30 times earnings on a business that might get to $6.6 billion of revenue next year if everything goes right. Nope, that revenue is not from software or services with a 90% gross margin, it is from a railroad. Yes, a railroad. A technology that peaked before any SA readers were born.

Apple (AAPL), Microsoft (MSFT) and Intel (INTC) all trade at less than 14 times earnings. Canadian Pacific Rail (CP) trades at 30 times last year's earnings and 25 times this year's estimate. Go figure

Canadian Pacific is not building new railroads, adding capacity, acquiring new businesses, or inventing anything new or exciting. What it is doing is running trains faster, running longer trains, scrimping on maintenance and repair, jacking up prices and ramming lower pensions down the throats of its employees if they want to keep their jobs.

That is surely worth a high multiple of earnings.

Suppose CP had the ability to eliminate all labor costs and just operate with the cost of fuel and materials and necessary purchased services and rentals. It would still trade at almost 13 times earnings.

http://seekingalpha.com/article/1877051-why-cp-is-a-train-wreck-waiting-to-happen?source=yahoo#comments_header



__________________

Even a broken clock is right twice a day

 

 

 



Cured

Status: Offline
Posts: 965
Date:
Permalink  
 

I read the entire article and it goes back to the idea of ethical investing. Something that never took off, as lets be honest for the most part people are greedy

__________________

Gentlemen, we all must realize that neither side has any monopoly on sons of bitches.
C.D. Howe (in Washington to resolve a shipping dispute)



Barely a pulse...

Status: Online
Posts: 2392
Date:
Permalink  
 

Don't want to work there or have your kids hiring on either. Just sayin.



__________________

Even a broken clock is right twice a day

 

 

 



Force Majeure

Status: Offline
Posts: 21401
Date:
Permalink  
 

LAMCO executives have been watching the story unfold with N.V.

__________________

Those who can make you believe absurdities can make you commit atrocities.  - Voltaire



Barely a pulse...

Status: Online
Posts: 2392
Date:
Permalink  
 

I am watching the story unfold with ennui.



__________________

Even a broken clock is right twice a day

 

 

 

Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.

Chatbox
Please log in to join the chat!