By Narrative Science Wall Street is optimistic about Union Pacific, which is slated to report its second quarter results on Thursday, July 18, 2013. Analysts project a profit of $2.35 a share, a rise from $2.10 per share a year ago. …read more
Source: FULL ARTICLE at Forbes Markets
By Dan Caplinger, The Motley Fool
Filed under: Investing
On Tuesday, CSX will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
As a major railroad company, CSX has benefited from high energy prices in recent years that have made rail transportation a more efficient way of moving goods over long distances. But the decline in demand for commodities like coal has crimped the railroad‘s results lately. Let’s take an early look at what’s been happening with CSX over the past quarter and what we’re likely to see in its quarterly report.
Stats on CSX
|
Analyst EPS Estimate |
$0.40 |
|
Change From Year-Ago EPS |
(7%) |
|
Revenue Estimate |
$2.91 billion |
|
Change From Year-Ago Revenue |
(1.7%) |
|
Earnings Beats in Past 4 Quarters |
4 |
Source: Yahoo! Finance.
Will CSX fire up its engines this quarter?
Analysts have gotten more pessimistic about CSX‘s earnings over the past few months, as they’ve cut back on their estimates for the just-ended quarter by $0.03 per share and chopped $0.07 per share off their full-year 2013 consensus. But the stock has kept motoring ahead, climbing more than 20% since early January.
Railroads have done extremely well in recent years by capitalizing on the big boom in commodities demand, especially overseas. For CSX, coal was a big driver of its major efficiency gains, as more than 70% of coal delivered to electricity-generating power plants goes by rail. But when rock-bottom natural-gas prices led electric utilities to shift from coal to gas to fuel their power plants, CSX and many of its rivals took big hits. In particular, Norfolk Southern , with similar geographic exposure to the Appalachian coal-producing region, shared CSX‘s declines.
But CSX has a couple of options to pursue to rebound. One way would be to take advantage of growing export demand for coal, as natural-gas prices in other areas of the world are far less competitive than they are within the U.S., and low shipping costs make global coal transport economically viable. The other alternative is to borrow a page from other railroads and seek to transport cheap domestic oil by rail from hard-to-reach areas to existing refineries, especially on the East Coast. Union Pacific and Canadian National have found high demand for their services in the oil-producing areas of Alberta and the Bakken, and although CSX‘s home territory is better served by existing pipelines, it could nevertheless have an opportunity to boost demand by meeting other needs.
In CSX‘s earnings report, watch to see how the railroad responds to the growing trend toward considering relocation of manufacturing capacity back into the U.S., as
From: http://www.dailyfinance.com/2013/04/14/csxs-earnings-should-keep-chugging-along/
Quick Take Connected to all the six major trade junctions with Mexico, Union Pacific is benefiting from the rising U.S.-Mexico trade. Mexico is the third largest trade partner of the U.S., accounting for 12.9% of the total U.S. trade in 2012. U.S. exports to Mexico are rising owing to strong growth in the Mexican economy. Revenues from Mexican business, which contribute to around 10% of Union Pacific’s overall freight revenues, grew by 16% and 8% in 2011 and 2012 respectively. We expect these revenues to keep growing in the future. …read more
Source: FULL ARTICLE at Forbes Latest
By Chuck Saletta, The Motley Fool
Filed under: Investing
As the market zigzagged over the past couple of weeks, the real-money Inflation-Protected Income Growth portfolio just kept humming along, collecting dividends and buying shares. Since the last general update near the end of March, the portfolio is up a couple hundred dollars, which isn’t bad given the near-daily whipsaw it feels like we’ve been riding recently.
The secret to the portfolio’s success isn’t much of a secret at all. Instead, it’s a time-tested approach to investing inspired by Benjamin Graham, the father of value investing and the man who taught investing to Warren Buffett. By combining the benefits of dividends, valuation, and diversification into one single vehicle, the iPIG portfolio is designed to let the companies behind the stocks, not the market‘s daily fluctuations, drive the investment returns.
So what did happen?
While the overall message was one of relative calm, the market‘s machinations did provide the iPIG portfolio the opportunity to pick up shares of Emerson Electric . As a company with over 55 years of consistently rising dividend payments, it’s a natural fit for a portfolio that seeks to invest in an increasing income stream. Yet until the market was so kind as to knock down Emerson’s price to a more reasonable level, it was simply too pricy to justify buying.
Additionally, Becton, Dickinson made good on its dividend pledge, handing the iPIG portfolio $8.91 for the 18 shares it holds ($0.495 per share). That was the second consecutive dividend by Becton, Dickinson at that level. Should the medical device titan follow recent trends, I anticipate that it could increase its dividend near the end of the year for its December payment.
Not to be outdone, Genuine Parts also continued its long streak of paying and increasing dividends. The iPIG portfolio picked up $12.36 for its 23 shares ($0.5375 per share). That was Genuine Parts‘ first dividend payment at its new higher rate, and like Emerson Electric, Genuine Parts can celebrate more than 55 consecutive years of increasing dividends.
Finally, Union Pacific kept moving money into the iPIG portfolio’s pocket, handing the portfolio $4.14 for the six shares it holds ($0.69 per share). As with Becton, Dickinson, that was Union Pacific‘s second dividend at its current level. Should that railroad giant keep with its pattern, it’d be on track to raise its dividend near the end of the year, as well.
And what comes next?
None of the companies in the iPIG portfolio are expected to pay dividends in the next week or so, but the portfolio still has a touch more than $3,000 in cash that it can deploy. About half of that is in a limit order waiting to see if the market will offer another opportunity to buy the stock that might get away. The other half? It’s available if the market offers up another compelling opportunity like it did last week with Emerson Electric.
To follow …read more
Source: FULL ARTICLE at DailyFinance
By Brian Pacampara, The Motley Fool
Filed under: Investing
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool’s free investing community, railroad giant Union Pacific has earned a coveted five-star ranking.
With that in mind, let’s take a closer look at Union Pacific and see what CAPS investors are saying about the stock right now.
Union Pacific facts
|
Headquarters (founded) |
Omaha, Neb. (1862) |
|
Market Cap |
$65.0 billion |
|
Industry |
Railroads |
|
Trailing-12-Month Revenue |
$20.9 billion |
|
Management |
CEO John Koraleski CFO Robert Knight Jr. |
|
Return on Equity (average, past 3 years) |
18.2% |
|
Cash/Debt |
$1.1 billion / $9.0 billion |
|
Dividend Yield |
2% |
|
Competitors |
Burlington Northern Santa Fe Canadian National Railway CSX |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 96% of the 1,364 members who have rated Union Pacific believe the stock will outperform the S&P 500 going forward.
Just last week, one of those Fools, tiomiguel, succinctly summed up the Union Pacific bull case for our community: “Passes all kinds of growth + value screens; steady upward trend in price for years (i.e., no cyclical surprises); should benefit if Keystone pipeline is cancelled again.”
If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong five-star rating, Union Pacific may not be your top choice.
We’ve found another stock we are incredibly excited about — excited enough to dub it “The Motley Fool’s Top Stock for 2013.” We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won’t be here forever, so click here to access it now.
Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.
The article Why Union Pacific Is Poised to Keep Chuggin’ originally appeared on Fool.com.
Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Canadian National Railway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
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function addEvent(obj, evType, fn, …read more
Source: FULL ARTICLE at DailyFinance
By Chuck Saletta, The Motley Fool
Filed under: Investing
The real-money Inflation-Protected Income Growth portfolio launched in early December 2012, with an initial $30,000 in capital. The portfolio’s primary goal is investing in a way that produces an income stream that grows at least as fast as inflation over time.
That’s easier said than done, especially in this era when money in the bank isn’t necessarily safe anymore, and dividend cuts to preserve capital are often needed to assure a company’s survival. The iPIG portfolio attempts to buffer itself against risks like that through paying attention to each pick’s valuation and by investing with an eye towards diversification, as well as to each company’s dividends.
The strategy is based on the writings of Benjamin Graham, the father of value investing and the man that taught investing to Warren Buffett, so there’s hope that it’ll work out over time. Still, it’s fair to ask how those principles are holding up today, especially in light of the economic and market chaos emanating from Cyprus.
So, how is it going?
The table below shows every selection of the iPIG portfolio that has been successfully turned into a real-money investment. There’s one additional pick that ran up before it could be purchased, but the iPIG portfolio has an open limit order in the hopes that it may fall back into the “buy” range.
|
Company |
Purchase Date |
# of Shares Owned |
Total Cost (including commissions) |
Current |
|---|---|---|---|---|
|
United Technologies |
Dec. 10, 2012 |
18 |
$1,464.82 |
$1,670.40 |
|
Teva Pharmaceuticals |
Dec. 12, 2012 |
38 |
$1,519.40 |
$1,519.62 |
|
JM Smucker |
Dec. 13, 2012 |
17 |
$1,483.45 |
$1,638.46 |
|
Genuine Parts |
Dec. 21, 2012 |
23 |
$1,476.47 |
$1,755.82 |
|
Mine Safety Appliances |
Dec. 21, 2012 |
36 |
$1,504.96 |
$1,771.20 |
|
Microsoft |
Dec. 26, 2012 |
55 |
$1,499.15 |
$1,548.80 |
|
Hasbro |
Dec. 28, 2012 |
43 |
$1,520.60 |
$1,877.81 |
|
NV Energy |
Dec. 31, 2012 |
84 |
$1,504.72 |
$1,660.68 |
|
United Parcel Service |
Jan. 2, 2013 |
20 |
$1,524.00 |
$1,692.20 |
|
Walgreen |
Jan. 4, 2013 |
40 |
$1,501.80 |
$1,847.60 |
|
Texas Instruments |
Jan. 7, 2013 |
47 |
$1,515.70 |
$1,620.56 |
|
Union Pacific |
Jan. 22, 2013 |
6 |
$805.42 |
$823.14 |
|
CSX/p> |
Jan. 22, 2013 |
34 |
$712.50 |
$812.26 |
|
McDonald’s |
Jan. 24, 2013 |
16 |
$1,499.64 |
$1,571.84 |
|
Beckton, Dickinson |
Jan. 31, 2013 |
18 |
$1,518.64 |
$1,663.74 |
|
Aflac |
Feb. 5, 2013 |
27 |
$1,466.35 |
$1,391.04 |
|
Air Products & Chemicals |
Feb. 11, 2013 |
17 |
$1,510.99 |
$1,486.99 |
|
Raytheon |
Feb. 22, 2013 |
27 |
$1,473.91 |
$1,532.52 |
|
Cash |
$4,624.95 |
|||
Data from the iPIG portfolio brokerage account, as of March 25, 2013.
The iPIG portfolio has been in existence for just over a quarter and has purchased 18 stocks, with two of those being half-size positions to build a national railroad network. The portfolio’s total value is nearly 8.4% above its starting level, and several of the picks have already increased their dividends. While it’s way too early to call the portfolio an overall success, the early news has been incredibly strong.
In-market results highlights and lowlight
Toy maker Hasbro has far surpassed expectations from a return-on-investment perspective, up an astounding 23.5% since being bought in late December. This is something of a surprise, especially since Hasbro missed expectations for the recent all-important winter holiday season. Still, Hasbro’s stock was bought at such a discount to its intrinsic value estimate that it hasn’t quite hit the sell range, yet. If it keeps climbing, though, it might earn the honor of being the first pick to be sold based on valuation.
Similarly, drugstore giant Walgreen has also risen an amazing 23% since being bought …read more
Source: FULL ARTICLE at DailyFinance
By CNNMoney
Filed under: Stock Picks, Industry News, Investing
There was the time Thomas Edison electrocuted an elephant to demonstrate the danger of a competitor’s technology. The day that Nike (NKE), desperate for an advantage over a surging Reebok, signed a college hoops player named Michael Jordan. And the time the Central Pacific Railroad laid an astounding 10 miles of track in 24 hours to grab government payments that the hated Union Pacific would otherwise claim.
Rivalries make great stories, and the greatest rivalries make the greatest tales — reason enough to read the following portraits of brilliance, skullduggery, nobility, mendacity, victory, and failure. But if you’re the driven type who demands more practical benefits, you’ll find those here too. After all, monumental business battles have changed the world. We cannot imagine life without cellphones or the Internet, but if tiny MCI hadn’t challenged the titanic AT&T (T) (the No. 4 rivalry in our ranking), the communications revolution would have played out much differently. Steve Jobs and Bill Gates (No. 6) ended up selling few competing products yet contended for 35 years to impose radically different visions on the world of computing. And a global economy that couldn’t function without air travel is far faster and better because Airbus and Boeing (BA) (No. 9) have had to fight each other every day for 40 years.
But powerful rivalries can be blinding, obscuring events beyond the combatants’ battlefield. Coke (KO) and Pepsi (PEP) (No. 1) were so busy pounding the daylights out of each other that they missed an entirely new notion, and today, inconceivably, the bestselling energy drink in U.S. convenience stores isn’t made by either company. (It’s Red Bull.) General Motors (GM) and Ford (F) obsessed over each other until one day Toyota (TM) had stolen the bulk of their profits.
What comes through most strongly in these stories is each conflict’s sheer human intensity. Only a brave novelist would have imagined the brother vs. brother saga of Adidas vs. Puma (No. 20). Venice vs. Genoa (No. 7) may look like a dusty tale of feuding city-states, but it set the tone for hundreds of years of European competition. The rivalry between the railroads was economic, ethnic, and spectacular, involving sabotage, deception, and death.
Who needs such lessons? Oh, right, you do. So think of these dramas as guilt-free pleasures. Then, well prepared for the task, go forth and pulverize your rivals.
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By Russ Krull, The Motley Fool
Filed under: Investing
New issues in U.S. corporate bond markets topped $43 billion last week, with foreign-based borrowers taking down more than half the total. Here’s a look at who’s doing the borrowing and what they’re doing with the money.
The biggest dose of borrowing came from GlaxoSmithKline , with three-, 10-, and 30-year prescriptions totaling $3 billion. The SEC filing didn’t provide many details, reading: “We intend to use the net proceeds for general corporate purposes, which may include the refinancing of existing indebtedness. We may also invest the net proceeds in marketable securities as part of our liquidity management process.”
Enterprise Products Partners piped $2.25 billion of fresh cash through its operating subsidiary with 10- and 30-year paper. The midstream partnership will use the money to repay maturing notes and pay down a credit facility and commercial paper.
Goldcorp dug up $1.5 billion spread over five- and 10-year notes. Most of the new money will be used to repay maturing convertible notes, with the rest going for capital expenditures or working capital.
Discovery Communications found some buyers for $1.2 billion split between 10- and 30-year channels. The possible uses for the money listed in Discovery’s press release include “the acquisition of companies or businesses, repayment and refinancing of debt, working capital, capital expenditures and the repurchase by the Company of its capital stock.”
Union Pacific loaded up $650 million between 10- and 30-year tranches. The money will be used to repurchase stock under the company’s share repurchase program.
Viacom entertained the bond market with 10- and 30-year notes totaling $550 million. The money will go toward paying down debt and share repurchases.
DCP Midstream Partners energized its cash levels by selling $500 million of 10-year paper through its operating subsidiary. The money will be used to finance the drop-down of a bigger piece of its Eagle Ford joint venture, announced in the company’s quarterly earnings last month.
Refinancing and share buybacks continue to be popular reasons for companies to tap credit markets, and there’s no sign of the cheap money supply drying up.
The growing production of natural gas from hydraulic fracturing and horizontal drilling is flooding the North American market and resulting in record-low prices for natural gas. Enterprise Products Partners, with its superior integrated asset base, can profit from the massive bottlenecks in takeaway capacity by taking on large-scale projects. To help investors decide whether Enterprise Products Partners is a buy or a sell today, click here now to check out The Motley Fool’s brand-new premium research report on the company.
var FoolAnalyticsData = FoolAnalyticsData || []; …read more
Source: FULL ARTICLE at DailyFinance
Filed under: Investing
As an investor, it pays to follow the cash. If you figure out how a company moves its money, you might eventually find some of that cash flowing into your pockets.
In this series, we’ll highlight four companies in an industry, and compare their “cash king margins” over time, trying to determine which has the greatest likelihood of putting cash back in your pocket. After all, a company can pay dividends and buy back stock only after it’s actually received cash — not just when it books those accounting figments known as “profits.”
Today, let’s look at Union Pacific and three of its peers.
The cash king margin
Looking at a company’s cash flow statement can help you determine whether its free cash flow actually backs up its reported profit. Companies that can create 10% or more free cash flow from their revenue can be powerful compounding machines for your portfolio. A sustained high cash king margin can be a good predictor of long-term stock returns.
To find the cash king margin, divide the free cash flow from the cash flow statement by sales: cash king margin = free cash flow / sales
Let’s take McDonald’s as an example. In the four quarters ending in December, the restaurateur generated $6.97 billion in operating cash flow. It invested about $3.05 billion in property, plant, and equipment. To calculate free cash flow, subtract McDonald’s investment from its operating cash flow. That leaves us with $3.92 billion in free cash flow, which the company can save for future expenditures or distribute to shareholders.
Taking McDonald’s sales of $25.5 billion over the same period, we can figure that the company has a cash king margin of about 14% — a nice high number. In other words, for every dollar of sales, McDonald’s produces $0.14 in free cash.
Ideally, we’d like to see the cash king margin top 10%. The best blue chips can notch numbers greater than 20%, making them true cash dynamos. But some businesses, including many types of retailing, just can’t sustain such margins.
We’re also looking for companies that can consistently increase their margins over time, which indicates that their competitive position is improving. Erratic swings in margins could signal a deteriorating business, or perhaps some financial skullduggery; you’ll have to dig deeper to discover the reason.
Four companies
Here are the cash king margins for four industry peers over a few periods.
|
Company |
Cash King Margin (TTM) |
1 Year Ago |
3 Years Ago |
5 Years Ago |
|---|---|---|---|---|
|
11.6% |
13.8% |
6.0% |
4.8% |
|
|
Canadian National Railway |
13.4% |
15.0% |
11.9% |
13% |
|
CSX |
5.1% |
10.2% |
6.8% |
4.1% |
|
Norfolk Southern |
Quick Take Union Pacific’s freight revenues rose by 6% annually in 2012, mainly owing to 7% rise is average revenue per car as the overall freight volume was flat in 2012 While coal volumes declined by 14% y-o-y in 2012, the company was able to offset some of this decrease with an 11% gain in revenue per car within the segment Automotive and chemicals segment registered an annual revenue increase of 20% and 15% respectively in 2012 Going ahead, we feel strong demand within automotive, chemicals and intermodal segment will continue to fuel growth for Union Pacific; however, headwinds in the agricultural and coal market will affect its volumes in 2013. Union Pacific Corporation is one of the leading railroad companies in the United States. Its freight revenues grew by 6% annually in 2012, mainly owing to core pricing gains and higher fuel surcharges, which led to a 7% gain in average revenue per car in 2012. However, its freight volumes in 2012 were almost flat compared to 2011, due to weakness in the coal and agricultural markets. Going ahead, we feel strong demand within the automotive, chemicals and intermodal segments will continue to fuel growth for the company in 2013. However, challenges in the coal and agricultural markets present headwinds for Union Pacific’s volumes. …read more
Source: FULL ARTICLE at Forbes Latest
By Anthony Wing Kosner, Contributor Something really momentous just happened, though if you are not a web geek, you may not have noticed. Just as two locomotives faced each other at Promontory Summit, Utah in 1869 to mark the meeting of the the Central Pacific and Union Pacific, creating this country’s first transcontinental railroad, with the hammering of a “golden spike,” the mighty Chrome and Firefox browsers have now met, face-to-face, for a chat.
Source: FULL ARTICLE at Forbes Latest
By Trefis Team, Contributor Union Pacific is set to announce its Q4 earnings Thursday, January 24. Of all the railroads in our coverage universe, Union Pacific was the best performer in the third quarter due to strong pricing gains and an improvement in margins.
Source: FULL ARTICLE at Forbes Latest
By Narrative Science Union Pacific (UNP) reports its fourth quarter earnings on Thursday, January 24, 2013.
Source: FULL ARTICLE at Forbes Markets
A grand jury has declined to indict the driver of a parade float involved in a train collision that killed four U.S. military veterans.
The panel decided Wednesday that Dale Andrew Hayden won’t face charges in the Nov. 15 accident in West Texas that killed four veterans who had served in Iraq and Afghanistan.
The flatbed truck Hayden was driving was hit by a Union Pacific train traveling at 62 mph. The truck was the second float in a parade organized to honor wounded veterans and their wives.
The National Transportation Safety Board is investigating the accident.
Union Pacific Corp. said in December that it was adjusting the timing of the crossing signal where the collision occurred.
Source: FULL ARTICLE at Fox US News
A grand jury on Wednesday declined to indict the driver of a float involved in a train collision that killed four U.S. military veterans in a West Texas parade.
Dale Andrew Hayden, the driver of the truck pulling the float, will not face charges stemming from the Nov. 15 accident that killed four veterans who had served in Iraq and Afghanistan. Sixteen other people were injured.
Midland County prosecutor Eric Kalenak had presented evidence to the 12-person grand jury.
The veterans were riding on a flatbed truck that was hit by a Union Pacific train traveling at 62 mph. The truck was the second float in a parade organized to honor wounded veterans and their wives.
The accident remains under investigation by the National Transportation Safety Board.
According to the NTSB, the railroad crossing warning system was activated 20 seconds before the accident, and the guardrail began to come down seven seconds after that. Investigators say the float began crossing the train tracks even though warning bells were sounding and the crossing lights were flashing.
Omaha, Neb.-based Union Pacific Corp. announced in December that it was adjusting the timing of the crossing signal where the collision occurred.
The veterans had been invited to Midland, a transportation and commerce hub in the West Texas oilfields, for a three-day weekend of hunting and shopping in appreciation of their service. A local charity, Show of Support, organized the trip, parade and other festivities.
Show of Support officials did not get a parade permit from the city.
In the days after the crash, Hayden was placed under a physician’s care and got counseling, his attorney, Hal Brockett has said.
Hayden, who has a military career spanning more than three decades, works as a truck driver for Smith Industries, an oilfield services company. The company placed Hayden on medical leave.
Killed were Marine Chief Warrant Officer 3 Gary Stouffer, 37; Army Sgt. Maj. Lawrence Boivin, 47; Army Sgt. Joshua Michael, 34; and Army Sgt. Maj. William Lubbers, 43.
Source: FULL ARTICLE at Fox US News
