- Video: Morningstar Anti-Recession Funds
- Global Tobacco Stocks Sizzle
- Defense & Energy Stocks in Vogue
- Analysts Upbeat on Back-To-School Stocks
- Options Take Action on Banks and Amylin
- Economist Likes Chip & Multimedia Stocks
- Water Stocks Help You Stay Afloat
- Prescriptions for Your Portfolio
- Oil Services Stocks: 'Huge' Growth Ahead
- Three European Banks to Look At
- Video: Morningstar Anti-Recession Funds
- Microsoft's $300 Million Makeover
- Barbie v. Bratz: Debating the Payout
- CSX 'Welcoming' Work With Activist Hedge Funds: CEO
- Heinz CEO: Ketchup 'Better Than Vodka' in Russia
- Video: Morningstar Anti-Recession Funds
- Segway Polo Nerds; Also: Your Mortgage Hardball E-Mails
- Hot Sauce, Tepid Stock?
- Cramer: Lehman's a 'Lurking Black Hole'
- Fast Money Now – Bove Upgrades Lehman, Other Mid-Day Trades for Thursday
- Best Trades Now: Energy, Defense, Food & More
- Why Markets Want Fannie, Freddie to Be Resolved
- Prescriptions for Fannie and Freddie
- Two Economic Indicators Show Continued Weakness
- Bonds Traders Prefer Fannie and Freddie Over Treasurys
- Jobless Claims Dip, But Overall Level Remains High
- Burger King Profit Up, Shares Fall on Margins
- Heinz Profit Rises, Beats Expectations
- UK Retail Sales Post Surprise Rise in July
Devastated cornfields are not the only effect this year's Midwestern floods are likely to have on the markets. Longbow Research's Lee Klaskow says the railroads that operate through the region are feeling the effects -- in their physical plants as well as in the commodities they carry.
Still, he sees a positive side.
"This is actually a welcome pullback for the stocks," he told CNBC. "The stocks are still up 20 percent over the last 12 months, and roughly 25 percent year-to-date, but...the railroads still continue to get pricing, despite having negative volume."
Recommendations:
So what would he buy at these valuations?
"Our favorite name right now is Burlington Northern Santa Fe [BNI
Loading...
()
]," he said. "Despite the...near-term headwinds...we still like its revenue mix: It has what we view as a more defensive revenue mix, that is, exposure to coal, ag(riculture), and intermodal."
He also likes Norfolk Southern [NSC
Loading...
()
], whose physical plant is located outside the flood-ravaged area.
"Norfolk Southern is, for us, the only deep value that's left within the rail industry," he said. "Norfolk Southern is the largest in terms of market share in (automotive) shipping; it's roughly 10 percent of their revenue. Obviously, with their largest customers GM [GM
Loading...
()
] and Ford [F
Loading...
()
], their near-term prospects have been hit pretty hard, but the long-term story for them is still intact."
Disclosures:
Neither Klaskow nor his firm owns shares in Burlington Northern Santa Fe or Norfolk Southern, and neither company has an investment-banking or other business relationship with Klaskow's firm.
Del.icio.us
Digg It
Data is a real-time snapshot *Data is delayed at least 15 minutes