Zacks Investment Ideas Feature Highlights: CSX, Genesee & Wyoming, Kansas City Southern and Canadian National Railway

News provided by

Jan 14, 2011, 09:30 ET

CHICAGO, Jan. 14, 2011 /PRNewswire/ -- Today, Zacks Investment Ideas feature highlights Features: CSX Corp. (NYSE: CSX), Genesee & Wyoming, Inc. (NYSE: GWR), Kansas City Southern (NYSE: KSU) and Canadian National Railway Co. (NYSE: CNI).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Can You Ride the Rails Higher?

So if the economy is showing signs of a sustained recovery, certain segments of the market should benefit, with rail shippers sitting at the top of the list.

Rail shippers are viewed as a leading economic indicator, with higher volumes and more shipments usually coming in tandem with increased business activity. We have definitely seen that play out over the last 6 quarters, with a number of North American rail shippers posting big gains as growing demand drove sales and earnings.

Let's go ahead and take a closer look at a few that are leading the pack.

Top 4 Rail Shippers

CSX Corp. (NYSE: CSX) is a large North American rail shipper, with a network of more than 21,000 miles and market cap of $26 billion. CSX has seen big gains over the last three months on a steady stream of improving economic data. The company has an average earnings surprise of 7% over the last four quarters and a bullish 17% growth projection. With a forward PE of 15X, shares trade at a discount to the industry average of 21X. Take a look below.

Genesee & Wyoming, Inc. (NYSE: GWR) is a smaller player in the rail space, with a market cap of $2.25 billion and rail network of 6,000 miles. This Zacks #2 rank stock has an average earnings surprise of 10% over the last four quarters and a very bullish 42% growth projection. But with a PEG ratio (PE/Growth) of .47%, shares trade well below the value benchmark of 1.

Kansas City Southern (NYSE: KSU) is a mid-sized player in the rail space, with a market cap of $5.3 billion and rail network of more than 25,000 miles. KSU has been on a roll for the last 18 months, recently accelerating into 2011 for a new multi-year high. The company has an average earnings surprise of 22% over the last four quarters and bullish 30% growth projection. And with a PEG ratio of .66%, KSU also has value.

Canadian National Railway Co. (NYSE: CNI) is the biggest of the lot, with a 21,000 rail network and market cap of $31 billion. But that hasn't stopped shares from blasting higher, recently hitting a new multi-year high after rallying with the market in late 2010. The company has an average earnings surprise of 9% over the last three quarters and solid next-year growth projection of 13%.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000 earnings estimates, looking for changes.

Then when changes are discovered, they're applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock picking system; the Zacks Rank, continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter Profit from the Pros. In short, it's your steady flow of profitable ideas GUARANTEED to be worth your time. Get your free subscription to Profit from the Pros at: http://at.zacks.com/?id=7298

Join us on Facebook: http://www.facebook.com/home.php#pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.