Why Genesee & Wyoming Is Poised to Keep Chugging

Market-trouncing returns could be written in this 4-Star.

Brian D. Pacampara, CFA
Brian D. Pacampara, CFA
Feb 12, 2013 at 7:53PM

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, regional freight railroad operator Genesee & Wyoming (NYSE:GWR) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Genesee & Wyoming and see what CAPS investors are saying about the stock right now.

Genesee & Wyoming facts



Headquarters (founded)

Greenwich, Conn. (1899)

Market Cap

$3.9 billion



Trailing-12-Month Revenue

$858.0 million


CEO John Hellmann (since 2007)

CFO Timothy Gallagher (since 2005)

Return on Equity (average, past 3 years)



$516.0 million/$647.5 million


Burlington Northern Santa Fe


Union Pacific (NYSE:UNP)

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 97% of the 930 members who have rated Genesee & Wyoming believe the stock will outperform the S&P 500 going forward.

Earlier this week, one of those Fools, All-Star 3Fairfield, brought three of Genesee's recent developments to our community's attention:

1. Accretion from recent Rail America acquisition should show up on the financials in 2013. This rail system services mid-America and some of the Bakken oil fields requirements.

2. [Genesee & Wyoming] operates many of the short line feeder rail lines and services in the developing Utica Shale region in eastern Ohio and western Pennsylvania. These lines will substantially increase operations/revenue in the latter half of 2013 when well drilling increases in the area. ...

3. In December 2012 [Genesee & Wyoming] signed a contract to provide the rail services to the new $900 million dollar oil and nat gas services, switching and transfer hub being built in Scio, Ohio in anticipation of the increased Utica Shale nat gas and oil shipments. They expect 10,000 rail cars a year to go through this facility. All contracted phases of this hub will be completed by the second quarter of 2014 according to M3Midstream officials. There are other hubs that [Genesee & Wyoming] contracts for as well.

I believe [Genesee & Wyoming] is succeeding in bolstering growth from both acquisition and organic opportunities and I expect 2013 and 2014 will be excellent years for the rail road.

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