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Burning Journal -> Canadian -> CP is a Train Wreck Waiting to Happen.
Post Info TOPIC: CP is a Train Wreck Waiting to Happen.
Thunderwagon5000


Barely a pulse...

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CP is a Train Wreck Waiting to Happen.
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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



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steam300


Cured

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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

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Thunderwagon5000


Barely a pulse...

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



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Snippy


Force Majeure

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

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Elmo?? Hell, no!
Thunderwagon5000


Barely a pulse...

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I am watching the story unfold with ennui.



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