Thursday, May 17, 2012

Wall Street rewards CP stock

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Investors on Wall Street, watching events at Canadian Pacific carefully throughout the week, continued to reward the company Thursday for its apparent—and now affirmed—shakeup of CP's Board of Directors.

At midday Thursday, shares of CP on the New York Stock Exchange were up 4.03% over a five-day period, and up 1.1% on the day. The gains Thursday followed gains the previous two days, including a 1.55% advance Wednesday, as it became increasingly evident that CP President and CEO Fred Green would lose a proxy battle with William Ackman, CEO of New York-based hedge fund Pershing Square Capital Management.

Spurred by the belief that a revamped CP board would bolster investor stakes, analysts on numerous websites, including TheStreet.com and MotleyFool.com, were issuing buy recommendations for the Class I railroad.

The vote of fiscal confidence has been spurred by the anticipation of E. Hunter Harrison replacing Green as CP’s CEO. "We anticipate that a new CEO will be named within four weeks of the board initiating the search, with Hunter Harrison ultimately selected as the successful candidate," RBC Capital Markets analyst Walter Spracklin said in a note.