Author: Jason Seidl

Cowen: ‘More Caution Surrounding Voting Trusts’

On May 19, we hosted a call with a noted transportation attorney to discuss the latest news surrounding the proposed merger involving KSU/CP/CNI. The STB decision on May 17 indicates more caution surrounding voting trusts; CNI must show that the trust keeps a level playing field. The key for CNI will be that public benefits outweigh harms.

Suds With Seidl: “Railroad Happy Hour”

We hosted rail industry experts in our third Suds with Seidl event. The overall mood was optimistic. The outlook for 2021 was strong, with one participant noting he was surprised to hear just how bullish his customers were this past week. Class I’s may be missing business opportunities, but there is still hope for greater communication via technology initiatives. We remain positive on the rail group.

Waiting for the whites of their eyes

Since March we have been very cautious on the near-term prospects for the railroad stocks, warning investors on multiple occasions about the disappointing volume outlook for the group. These warnings have proven timely as the group has fallen 9% in 2Q 2015 and 14% year to date. Earnings expectations have been coming in, but the big question in the minds of investors has been if/when to put more money to work in the railroads. We believe the group is still a good long-term spot for investors to park their money but acknowledge that timing will be imperative in order to maximize returns.