More reasons for CP’s bright outlook

Article Excerpt

CP Rail’s growth prospects are bright—and now, it has received a big vote of confidence from U.S.-based activist investor Bill Ackman—he holds shares and options that could give him a 2% stake. The activist sold his original shares in CP in 2016 for a big profit. This new stake reflects his belief that CP is poised for more gains, particularly as railways play a vital role in North America’s recovery from the pandemic. We agree with Ackman and see CP Rail as an attractive buy. CANADIAN PACIFIC RAILWAY $95.70, is a buy. The company (Toronto symbol CP; shares outstanding: 929.7 million; Market cap: $86.4 billion; Rating: Above Average; Dividend yield: 0.8%) is now in the process of merging with U.S.-based railway Kansas City Southern (KCS). The deal was worth about $28 billion U.S. Meantime, CP’s revenue in the three months ended March 31, 2022, fell 6.2%, to $1.84 billion from $1.96 billion a year earlier. The lower revenues are largely due to harsh winter weather and…