I checked on there stock price on Thursday and it was at $50.00 dollars a share ,not good , compaird to UP ,or NS which was paying a very good divedind. Things are just as bad here in Cincinnati ,including the re routing of serveral Q trains up the INDI sub. And Queens Gate yard is plugged so bad that NS is reouting trains up the old Pennsy line to Hamilton, which is single track line. Hunter Harrison is running the railroad into the ground. If he continues on this path I look for CSX to be bankrupt by next year.
Balt,
I agree that hedge funds are not widows and orphans who might sit on their stock for a generation, but paying out all the cash in the till and massively defering maintenance is not a formula for hedge fund success.
CSX has 913 million shares of stock. Earnings per share is $1.91. Dividends are less, probably 80 cents to $1. My source, suprisingly did not include that data.
Over 90% of the stock is held by institutions, the balance by individual investors. Instititions include Mantle Ridge, but are mostly mutual funds or other investment vehicles. Some of those are actively managed, which means they pay attention to what management is doing. They are always looking for the kind of shenagins you describe and usualy take them as a sign to sell. Today’s stock price is $51.44. Do you really think the investors would see robbing the cash register and the fixed plant to the tune of $913 million to pay them a one time dollar dividend as a good financial plan? Investors are not THAT stupid.
You could argue that the non Mantle Ridge investors are mighty stupid for buying the story that EHH will substantially improve earnings. That is the story Mantle sold. I agree that investors over bought the EHH magic story, but he did work magic three times.
If you look at stock price over the past year from Sept to Jan 18 price was generally rising from $30 to $36.88, 20% over 6 months, which is not bad. On or about Jan 18 price jumped to $48, a 30% gain OVERNIGHT. That is the day Mantle went public with its EHH plan. Price exceeded $50 about April 20, dropped below $50 on July 25, and last closed at $51.44.
What impresses me is that the institutional investors, taken as a group, first believed the EHH is a railroad healer story. Second, despite the wailing here and on other peanut gallery sites (it seems), and despite the real service problems that EHH created by doing too much too fast, the professional investors are staying with him as indicated by the rela
LOL, you really don’t understand how the stock market works…
https://www.thebalance.com/why-per-share-price-is-not-important-3140791
Isn’t that the way Wall Street wants it for the average investor?
Jeff
CSX, historically, has wanted their stock to trade in the $30-40 range. When it gets above $60 and stays there for a period of time, CSX takes actions to have a stock split.
Comparing companies based on the stock price is a bad indicator of the value of the company. Each company has a price range that they WANT their stock to trade at. What each companies reasons are for their intended trading price would fill the Library of Congress with their strategies.
CSX under EHH will continue to pay dividend at their ‘normal’ rate and might even increase the dividends - where the money to pay for the dividends is coming from will be the question.
[quote user=“BaltACD”]
CSX, historically, has wanted their stock to trade in the $30-40 range. When it gets above $60 and stays there for a period of time, CSX takes actions to have a stock split.
Comparing companies based on the stock price is a bad indicator of the value of the company. Each company has a price range that they WANT their stock to trade at. What each companies reasons are for their intended trading price would fill the Library of Congress with their strategies.
CSX under EHH will continue to pay dividend at their ‘normal’ rate and might even increase the dividends - where the money to pay for the dividends is coming from will be the question.
[quote user=“BaltACD”]
Like virtually all publically traded companies CSX shows their dividend rate. Go to CSX.COM, investors, stock information, dividends and split history.
From this table, which shows quarterly dividends, the most recent stock split was third quarter of 2011 as the August 31 quarterly dividend was $.12. Previous dividend was $.36 which implies a 3 for 1 stock split between the dividend dates.
Since then dividends, which are declared by the Board of Directors each quarter, have increased 1 or 2 cents per quarter from time to time in more or less steady progression to $.18 on May 29, 2015. On May 31, 2017, under new management, dividends increased to $.20 per quarter, in a continuation of the previous pattern. That is an annual rate of $.80 per share. Based on earnings of about $1.90 per share, that is a 42% payout rate, which is similar to other Class I railroads.
The answer to the question of where the money comes from to pay dividends is the very mundae, from earnings. Watch the earnings. They underpin both dividends and the stock price for railroads.
Fully understand that dividends are paid from ‘profits’; however, it is what gets defined as profit and where that money comes from that is in question. Even Penn Central paid dividends - pulling money from areas that should have been used to maintain the property and putting it into the ‘profit’ line on financial statements.
Oh please!
The Penn Central situation was very very different. Books have been written, unually by the economically illiterate trying to sensationalize a bad situation by discussing rearranging the deck chairs after the Titanic hit the iceburg of idiot government regulations.
The current CSX situation is in no way comparable.
Pulling money from maintenance of plant and equipment into profit is as old as the first business. With EHH and Paul Hilal in charge who knows how the books will be cooked.
It’s not comparable - at present, because we only found out about PC in its post mortem examination. We aren’t privy to the financial decisions CSX is making today.
It’s well known that PRR took an operating loss in 1946 but paid a dividend anyway, probably based on dividend payments from its 1/3 interest in N&W. This appears to have been a practice that continued into the 1960’s.