cp rail

CANADIAN PACIFIC RAILWAY LTD. $208.83 (Toronto symbol CP; Shares outstanding: 161.0 million; Market cap: $34.0 billion; TSINetwork Rating: Above Average; Dividend yield: 0.7%; www.cpr.ca) transports freight over a 22,000-kilometre rail network between Montreal and Vancouver, as well as hubs in the U.S. Midwest and Northeast. CP continues to benefit from lower fuel prices and an aggressive cost-cutting plan, but the slowing economy is hurting its freight volumes and revenue. That has caused the shares to fall about 14% from earlier this year. In the three months ended June 30, 2015, the railway earned $404 million, up 8.9% from $371 million a year earlier. Per-share profits jumped 16.1%, to $2.45 from $2.11, on fewer shares outstanding....

CANADIAN PACIFIC RAILWAY LTD., $204.48, Toronto symbol CP, continues to benefit from lower fuel prices and an aggressive cost-cutting plan, but the slowing economy is hurting its freight volumes and revenue. In the three months ended June 30, 2015, the railway earned $404 million, up 8.9% from $371 million a year earlier. Per-share profits jumped 16.1%, to $2.45 from $2.11, on fewer shares outstanding. These results exclude unusual items, such as a foreign-exchange loss on CP’s U.S. dollar-denominated debt. On that basis, they just missed the consensus estimate of $2.46. Revenue fell 1.8%, to $1.65 billion from $1.68 billion, also falling short of the consensus forecast of $1.68 billion....

PENGROWTH ENERGY $2.89 (Toronto symbol PGF; Shares outstanding: 539.7 million; Market cap: $1.6 billion; TSINetwork Rating: Average; Dividend yield: 8.3%; www.pengrowth.com) plans to sell $600 million worth of less important properties by the end of 2015. The company will use the cash to pay down its total debt of $2.0 billion, which is a high 1.3 times its $1.6-billion market cap. Pengrowth is still a buy for aggressive investors....

CENOVUS ENERGY INC., $19.44, Toronto symbol CVE, has agreed to sell its royalty lands to the Ontario Teachers’ Pension Plan. The company collects royalties from firms that drill for oil and gas on these properties, which total 4.8 million acres in Alberta, Saskatchewan and Manitoba. It also gets some of the oil these drillers recover: in the first quarter of 2015, these wells supplied 7,800 barrels a day, or 3.6% of the Cenovus’s daily oil production of 218,020 barrels. Cenovus will receive $3.3 billion when it completes the sale, probably before July 31, 2015. To put that in context, its market cap (or the value of all of its outstanding shares) is $16.1 billion....

CANADIAN PACIFIC RAILWAY LTD. $208.00 (Toronto symbol CP; Shares outstanding: 164.0 million; Market cap: $34.0 billion; TSINetwork Rating: Average; Dividend yield: 0.7%; www.cpr.ca) fell recently in response to Teck Resources’ decision to shut down its six Western Canadian coal mines for about three weeks in the third quarter of 2015. The company is closing the mines because China’s slowing economic growth has hurt sales to steelmakers, while Australia’s rising coal production has depressed prices. CP has an exclusive contract to ship coal from five of Teck’s southeastern B.C. mines to the Port of Vancouver. In the first quarter of 2015, coal shipments from Teck and other miners accounted for 10% of the railroad’s revenue. The company is aggressively cutting costs and improving efficiency. Its plans include speeding up trains and reducing the amount of time they spend at terminals. These moves should help CP offset the lost revenue....

CAE INC., $14.85, Toronto symbol CAE, earned $64.1 million, or $0.24 a share, in its fiscal 2015 fourth quarter, which ended March 31, 2015. That’s up 6.8% from $60.0 million, or $0.23, a year earlier. The latest earnings matched the consensus forecast. Revenue rose 9.7%, to a record $631.6 million from $575.7 million, beating the consensus estimate of $627.2 million. CAE gets 58% of its revenue by selling flight simulators and pilot-training services to airlines, and this business’s revenue rose 13.6% during the quarter. CAE sold 10 simulators during the period, bringing the full-year total to 41; it sold a record 48 simulators in fiscal 2014....

CANADIAN PACIFIC RAILWAY LTD. $232.62 (Toronto symbol CP; Shares outstanding: 164.2 million; Market cap: $38.5 billion; TSINetwork Rating: Average; Div. yield: 0.6%; www.cpr.ca) has reported record first-quarter results.

In the three months ended March 31, 2015, the company earned $375 million, up 49.4% from $251 million a year earlier. Per-share profits jumped 59.2%, to $2.26 from $1.42, on fewer shares outstanding. Revenue rose 10.3%, to $1.67 billion from $1.51 billion.

CP saw strong gains from shipping grain, fertilizers, coal, forest products, chemicals and consumer goods. That offset fewer shipments of crude oil, automotive products and metals.

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A holding company is a company that owns all or a substantial part of a variety of different businesses. These businesses may be private companies, or publically traded. Holding companies may own all, or a majority or a minority, of companies in which they invest. The one thing most holding companies have in common is that they trade for less than the combined value of their holdings. This “holding company discount” is a well-known phenomenon in finance. It represents a special kind of hidden asset and potential profit for investors in holding companies. When holding companies sell assets or break themselves up into their constituent parts, much if not all of the discount may disappear. In other words, holding companies can usually sell their assets for fair market value, rather than at a discount. In addition, fair market value may turn out to be be more than analysts figured they were worth. Even without a break-up, buying a holding company at a discount to its asset value puts more assets to work for you for each dollar you invest....

CANADIAN PACIFIC RAILWAY LTD. $232.62 (Toronto symbol CP; Shares outstanding: 164.2 million; Market cap: $38.5 billion; TSINetwork Rating: Average; Div. yield: 0.6%; www.cpr.ca) has reported record first-quarter results. In the three months ended March 31, 2015, the company earned $375 million, up 49.4% from $251 million a year earlier. Per-share profits jumped 59.2%, to $2.26 from $1.42, on fewer shares outstanding. Revenue rose 10.3%, to $1.67 billion from $1.51 billion. CP saw strong gains from shipping grain, fertilizers, coal, forest products, chemicals and consumer goods. That offset fewer shipments of crude oil, automotive products and metals....