Tuning an instrument like a violin is an exact science, where the end result can be measurable perfection.
Tuning a company to prevailing business conditions is far less precise. The most laudable achievements in efficiency are by nature non-recurring, since the result is a company moving ever closer to perfect pitch.
Canadian National Railway
Quarter after quarter, I have watched with amazement as the railroad industry has squeezed every ounce of profit imaginable out of deteriorating revenue streams by fine-tuning costs and operating efficiency. Despite my cautious fundamental outlook on the sector, leading operators like Burlington Northern Santa Fe
With a big move into future efficiency gains, Canadian National announced this week that it will purchase 70 new high-efficiency locomotives over the next several years. Of those, half will be from General Electric's
Short of screaming "danger" from the rooftops, Canadian National CEO Hunter Harrison echoed the theme of moderating expectations for a swift recovery, stating: "I think we have bounced across the bottom and now we are starting to float to the top." Indeed, the prospect for further deterioration of the greenback vis-a-vis the Canadian dollar threatens to erode earnings in the fourth quarter. Oil's creeping price appreciation raises another red flag.
I continue to view Canadian National Railway as a top competitor from an operational standpoint, but I consider a warm bench at the train station the best position for investors just now.