After shouting from the rooftops to steer Fools well clear of a railroad industry in fundamental freefall, I can finally report that the tracks have leveled out. Whether this is the bottom that CSX
Burlington Northern Santa Fe
The ability of these railroads to remain solidly profitable in the face of these incredibly difficult business conditions is truly an amazing achievement.
I've been steadfast in sounding alarm bells about fundamental weakness in the various industries that drive rail freight traffic, but it seems I underestimated the railroads' capacity for shredding costs as revenue declined mercilessly. Burlington Northern Santa Fe delighted vested Berkshire Hathaway
I still believe that a long, hard path awaits these operators, but their effective response to the crisis has mitigated a portion of my concern. Still, I just can't shake the feeling that shares have gotten ahead of themselves.
I find Canadian National Railway
Consider the outlook of the haulers themselves. Union Pacific CEO Jim Young declared: "We've got a long ways to go before you can declare the recession's over." Burlington Northern CEO Matt Rose noted: "We normally see a lot of improvement in the third quarter -- we're just not seeing that. But we are seeing stability in the volumes."
Any recovery will crawl at the speed of an Appalachian coal train, so I simply see no rush to hop aboard.
- Get a better deal than Buffett.
- Throw steelmakers a bone already.
- Reality bites the U.S. coal industry.