Despite Wall Street Woes, CSX on Track
We’ve all heard of a “yes man.” But what about a “no man.”
That’s exactly what CSX CEO Michael Ward was during his interview with Cramer on Tuesday’s Mad Money. Here’s a sample:
Cramer: Is the Wall Street dilemma slamming headlong into your business on Main Street?
Cramer: What about the stronger dollar? Is it hurting your export business?
Cramer: You’ve been re-pricing your contracts. Have those been weak?
With coal prices spiking worldwide due to lack of supply, and fertilizers, ethanol and metals are all still strong, the rails transportation business is a good one right now, Ward said. And that worldwide demand is offsetting any modest move in the dollar. Sure, there are weaker segments – think autos and housing – but CSX’s portfolio is diversified, providing cushion where necessary.
Oddly, though, CSX’s stock is down even though the company just raised its guidance. The operating-income-growth rate was bumped up to 15% to 20% a year from 13% to 15%. Earnings-per-share growth is expected to climb 20% to 25% rather than 18% to 21%. Pricing, and this is where those contracts come in, is expected to be up 6% year over year.
If anything, consider the pullback in CSX a great buying opportunity.
“Rails, still a place to be,” Cramer said. “Amazing, given the fact that everything else is so weak.”
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