Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, regional railroad operator Kansas City Southern (NYSE: KSU) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Kansas City Southern's business and see what CAPS investors are saying about the stock right now.
Kansas City Southern facts
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Headquarters (founded)
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Kansas City, Mo. (1962)
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Market Cap
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$1.47 billion
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Industry
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Railroads
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Trailing-12-Month Revenue
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$1.75 billion
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Management
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CEO Michael Haverty (since 2000)
CFO Michael Upchurch (since 2008)
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Compound Annual Revenue Growth (over last five years)
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24.3%
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Competitors
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Burlington Northern (NYSE: BNI)
Union Pacific (NYSE: UNP)
Canadian National Railway (NYSE: CNI)
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CAPS Members Bullish on KSU Also Bullish on:
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General Electric (NYSE: GE)
Vale (NYSE: VALE)
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CAPS Members Bearish on KSU Also Bearish on:
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Ford Motor (NYSE: F)
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Sources: Capital IQ (a division of Standard & Poor's), Yahoo! Finance, and Motley Fool CAPS.
Over on CAPS, some 98% of the 376 members who have rated Kansas City Southern believe the stock will outperform the S&P 500 going forward. These bulls include TSIF and forexnutca, both of whom are ranked in the top 2% of our community.
Two weeks ago, TSIF explained why the "Show Me State" stock would soon show us the money:
With profit margins of 8% and operating margins of 20%, it is doing fairly well. Cash flow is a little weak in this recession, but ample to cover the debt, similar to all railroads. Overall, I think this one was beaten down like the rest, but is slower to come back, making it a good, overlooked buying opportunity.
In an earlier pitch, forexnutca taps the stock as a serious candidate for a certain Oracle:
Ok...let me get this straight. A Class 1 railroad for below book value!? [Kansas City Southern] pretty much controls the southern passage to Mexico and owns chemical and petroleum plants which were damaged by Hurricanes Gustav. Add a recession and a swine flu and you have a super cheap stock. This is the type of stuff Buffett dreams of. [Kansas City Southern] is like that proverbial "toll bridge" that he dreams about in his younger days. This is no Baltic dry shipper with no moat ... this is a RAILROAD!
What do you think about Kansas City Southern, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.
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