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Get On Board These Rail Stocks

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Being of Irish decent sometimes after putting in a long day a hum a tune on my way home.  I think back to the Irishmen and women that came before me and how so many made their living by building the railways. 

I heard plenty of stories from my elders of those that came before me and how they worked on the railways.  In fact, there are plenty of ballads about just this sort of thing and here is my favorite:

Of course, I am not writing this article to show off that my ancestors helped build the nations rail system.  Their hard work laid the path to an easier life that I have in writing about stocks and helping investors use their money to make money.

The rail stocks are in the top 7% of all the industries that are ranked by Zacks.  At #17 of 256, the group of ten stocks has 7 that are Zacks Rank #2 (Buy) while the other 3 are Zacks Rank #3 (Hold).

Traffic Numbers

Genesee and Wyoming (GWR - Free Report) reported traffic for June back on July 14 and noted that there was 12.4% growth in carloads on a year over year basis.  On a same-railroad traffic basis, carloads were down 0.6%.

GWR is a Zacks Rank #2 (Buy) but could be a Zacks Rank #1 (Strong Buy) if it were not for some negative earnings revisions for this coming quarter.  Oddly, those negative revisions did not impact the current year estimates.  That tells me that the analysts that lowered estimates in this quarter raised them to the same level down the road in future quarters.

Reported Yesterday

CSX Corporation (CSX - Free Report) reported yesterday and beat the Wall Street estimate by $0.05 and saw revenues come in ahead of expectations as well. Volume was up 2% driven by strong coal shipments while pricing increased 7%

CSX is a Zacks Rank #2 (Buy) but could move higher to a Zacks Rank #1 (Strong Buy) following this report.  Analysts are likely going to be revising their models so over the next few days, we could see this stock move up to the highest Rank.

Looking Ahead

KC Southern (KSU - Free Report) is slated to report on 7/21 before the open. The stock is a Zacks Rank #2 (Buy) and was recently upgraded. The stock was upgraded by Credit Suisse to Outperform from Neutral in June.

Over the last few months, there have been tons of positive earnings estimate revision for KSU.  The current quarter has seen expectation move from $1.24 to $1.26. The following quarter has seen estimates move from $1.32 to $1.36.

Rolling On

One stock that has been rolling is Norfolk Southern (NSC - Free Report) which just so happens to be a Zacks Rank #2 (Buy).  The stock also carries value and growth style score of B while momentum is an A.  The company is expected to report earnings on July 26 before the market opens.

Estimates continue to be on track to move higher. The upcoming quarter has seen the Zacks Consensus Estimate move from $1.59 to $1.63 over the last 90 days. 

The full year estimates appear to be on rails, moving consistently over the last 90, 60, 30 and 7 days.  You can view that movement for any stock on the detailed estimates page under the magnitude section, for NSC ( you find it in the enclosed link.


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