The transport of agricultural commodities and export coal showed particular strength this quarter. As I discussed in a recent article on Canadian Pacific Railway
This freight-mover isn't afraid of an economic slowdown. Otherwise, I don't see how CSX management could justify levering up the corporate balance sheet -- i.e., taking on more debt -- to buy back 15% of shares and hike dividend payments by 25%. Nevertheless, the housing slump is taking its toll on shipment volumes. Lumber, building products, and aggregates are all being taken to the woodshed, and not in a good way. Housing pain is set to continue, and only CSX's pricing power is keeping it from experiencing a similar spanking.
Does CSX's wide moat make it a buy today? I'm having a tough time deciding. I believe that the firm will stick to its focus on yield (that revenue per unit figure I mentioned earlier), rather than competing on price to chase volume. That's pretty easy to do when your competition is limited. Still, out of the "Big Six," CSX doesn't particularly stand out to me. Competitors like Canadian National Railway
Investors here should train their thoughts on one key question: whether the apparently high quality of CSX's management merits its small share-price premium.
Further Foolishness at full steam: