CP
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CANADIAN PACIFIC RAILWAY LTD. $164 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 175.4 million; Market cap: $28.8 billion; Price-to-sales ratio: 4.8; Dividend yield: 0.9%; TSINetwork Rating: Above Average; www.cpr.ca) is selling 26% of the track miles of its Dakota, Minnesota & Eastern (DM&E) railway, which carries grain, fertilizer and other products between Minnesota and South Dakota.
The company acquired DM&E in 2008 for $1.5 billion. It decided to sell this portion as part of its new plan to focus on its more profitable rail lines. It will receive $210 million U.S. when the deal closes later this year. That’s equal to 69% of the $331 million (Canadian), or $1.88 a share, that CP earned in the three months ended September 30, 2013.
CP Rail is a buy....
The company acquired DM&E in 2008 for $1.5 billion. It decided to sell this portion as part of its new plan to focus on its more profitable rail lines. It will receive $210 million U.S. when the deal closes later this year. That’s equal to 69% of the $331 million (Canadian), or $1.88 a share, that CP earned in the three months ended September 30, 2013.
CP Rail is a buy....
CANADIAN PACIFIC RAILWAY LTD. $164 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 175.4 million; Market cap: $28.8 billion; Price-to-sales ratio: 4.8; Dividend yield: 0.9%; TSINetwork Rating: Above Average; www.cpr.ca) is selling 26% of the track miles of its Dakota, Minnesota & Eastern (DM&E) railway, which carries grain, fertilizer and other products between Minnesota and South Dakota.
The company acquired DM&E in 2008 for $1.5 billion....
The company acquired DM&E in 2008 for $1.5 billion....
ISHARES S&P/TSX 60 INDEX FUND $19.25 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets.
The index mostly consists of high-quality companies. However, it must ensure that all sectors are represented, so it holds a few we wouldn’t include.
The index’s top holdings are Royal Bank, 8.3%; TD Bank, 7.3%; Bank of Nova Scotia, 6.4%; Suncor Energy, 4.5%; CN Railway, 4.1%; Bank of Montreal, 3.9%; Manulife Financial, 3.1%; Canadian Natural Resources, 3.1%; CIBC, 3.0%; BCE, 3.0%; Enbridge, 3.0%; Valeant Pharmaceuticals, 2.9%; TransCanada Corporation, 2.7%; Potash Corp., 2.4%; CP Rail, 2.1%; Telus, 2.0%; and Cenovus, 1.9%.
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The index mostly consists of high-quality companies. However, it must ensure that all sectors are represented, so it holds a few we wouldn’t include.
The index’s top holdings are Royal Bank, 8.3%; TD Bank, 7.3%; Bank of Nova Scotia, 6.4%; Suncor Energy, 4.5%; CN Railway, 4.1%; Bank of Montreal, 3.9%; Manulife Financial, 3.1%; Canadian Natural Resources, 3.1%; CIBC, 3.0%; BCE, 3.0%; Enbridge, 3.0%; Valeant Pharmaceuticals, 2.9%; TransCanada Corporation, 2.7%; Potash Corp., 2.4%; CP Rail, 2.1%; Telus, 2.0%; and Cenovus, 1.9%.
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Exchange traded funds (ETFs) are set up to mirror the performance of a stock-market index or subindex. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index.
ETFs trade on stock exchanges, just like stocks....
ETFs trade on stock exchanges, just like stocks....
CANADIAN PACIFIC RAILWAY $151.56 (Toronto symbol CP; Shares outstanding: 175.1 million; Market cap: $26.4 billion; TSINetwork Rating: Average; Dividend yield: 0.9%; www.cpr.ca), transports freight between Montreal and Vancouver and connects with hubs in the U.S. Midwest and northeast.
In the quarter ended September 30, 2013, CP’s revenue rose 5.7%, to $1.53 billion from $1.45 billion a year earlier. Earnings jumped 144.7%, to $331 million, or $1.88 a share, from $224 million, or $1.31.
CP’s operating ratio improved to 65.9% from 74.1% a year ago. (Operating ratio is calculated by dividing regular operating costs by revenue. The lower the ratio, the better.) The company shipped more goods and made better use of its assets in the latest quarter. CEO Hunter Harrison feels he can cut CP’s operating ratio even further.
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In the quarter ended September 30, 2013, CP’s revenue rose 5.7%, to $1.53 billion from $1.45 billion a year earlier. Earnings jumped 144.7%, to $331 million, or $1.88 a share, from $224 million, or $1.31.
CP’s operating ratio improved to 65.9% from 74.1% a year ago. (Operating ratio is calculated by dividing regular operating costs by revenue. The lower the ratio, the better.) The company shipped more goods and made better use of its assets in the latest quarter. CEO Hunter Harrison feels he can cut CP’s operating ratio even further.
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CP is now up almost 105% since we recommended it in March 2012. That was just after we made CP our “Stock of the Year” for 2012 in The Successful Investor, our conservative growth advisory. CP’s CEO, Hunter Harrison, is now cutting 25% of the company’s workforce as part of a major restructuring aimed at improving its efficiency and cutting costs....
Here’s another item in the series we started last week, about the way investors value individual stocks. Q: Pat: Bombardier has annual sales of $18 billion, earnings of $600 million and cash of $3 billion. CP Rail has sales of $6 billion, earnings of $1 billion, and cash of $442 million. Why then is Bombardier’s market cap of $9.3 billion so much lower than CP’s market cap of $26.0 billion? CP is just a random comparison, but I don’t understand why an international giant like Bombardier has such a low value....
CANADIAN PACIFIC RAILWAY LTD. $134 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 175.0 million; Market cap: $23.5 billion; Price-to-sales ratio: 3.9; Dividend yield: 1.0%; TSINetwork Rating: Above Average; www.cpr.ca) transports freight between Montreal and Vancouver and connects with hubs in the U.S. Midwest and Northeast. It gets 25% of its revenue from the U.S.
CP was our top pick for 2012 at $69. Since then, the stock has jumped 94.2%.
The company continues to improve its efficiency, mainly with more efficient locomotives, better tracks, and software that optimizes train loads and speeds. In the quarter ended June 30, 2013, CP’s earnings soared 144.7%, to $252 million from $103 million a year earlier. Per-share earnings gained 138.3%, to $1.43 from $0.60, on more shares outstanding.
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CP was our top pick for 2012 at $69. Since then, the stock has jumped 94.2%.
The company continues to improve its efficiency, mainly with more efficient locomotives, better tracks, and software that optimizes train loads and speeds. In the quarter ended June 30, 2013, CP’s earnings soared 144.7%, to $252 million from $103 million a year earlier. Per-share earnings gained 138.3%, to $1.43 from $0.60, on more shares outstanding.
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