Why has KCS stock been fluctuating so wildly of late? It has been regularly bouncing between $21 and $24 all day long.
I did not think that the 2005 Q3 earnings were THAT bad.
Isn’t KCS the next likely takeover target?
If you think KCS is bouncing around a lot, take a look at Exxon/Mobil, or GM.
Yep! KCS is next in CNIC’s sights. If you have the stomach for the risk, buy a boxcar load of KCS shares and wait for CN to ask you to vote them at a grossly geneorous premium like 1 CN share at $85 CDN in exchange for 1 KCS share at $25US. I cannot wait! $$$$$$ cha ching!
Just for reference KCS stock just closed at 21.55 vs 16.45 one year ago. KCS is a very profitable railroad as evidenced by the acquisition and rehabilation of the entire MidSouth Rail Corp (ex ICRR LA and MS lines) from cash on hand without any borrowing. Naimo is uninformed as to KCS’s interest and ability to upgrade any former SP Texas line. KCS trackage, rolling stock and motive power is in top notch condition. I doubt if any road seeking to take over the KCS has deep enough pockets to make the acquisition.
Mark
Stock prices do not always reflect the strengths or weaknesses of the underlying firm, ask anyone who made or lost a bundle on the tech bubble. Fluctuation within a relatively narrow range doesn’t mean too much in and of itself.
You’re absolutely right and by the way, I could have bought CP at less than eleven dollars a year ago. Ouch!
One thing I do is to compare a specific railroad with the Dow Jones Transportation Index (not their industrial index). If DJTI is bouncing around then Wall Street has interest in the transportation industry but if DJTI is stable and the RR is moving up or down, then the focus is on the RR’s performance.
dd
ps - in Dow’s economic theory, the transportation index is as important as the industrial index. Makes you wonder why the popular press routinely reports the industrial index but not the transportation index.
A possible takeover target right now is Railpower Technologies.
http://www.railpower.com/