Norfolk Southern Corp. (NYSE:NSC)

RR#1

Weakest of the major railroads, but the fundamentals are still sound, they serve major markets, and are trying to reduce dependency on coal. Valuation play.

1/2/2013
Valuation Play
Est. PEG at .8
Div. Yld 3%

Railroad seems to be undervalued relative to other railroads. Does not look expensive. Good div. valuepro valuation around $100 with 10% growth

Hard to ignore the fundamentals here even if the economy falters.

“When Warren lectures at business schools, he says, “I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so you had twenty punches – representing all the investments that you get to make in a lifetime. And once you’ve punched through the card, you couldn’t make any more investments at all. Under those rules, you’d really think carefully about what you did, and you’d be forced to load up on what you’d really thought about. So you’d do much better.”" – Charlie Munger

In the spirit of this idea, I made 5 initial punches/picks, and will thereafter make a maximum of 1 pick per fiscal quarter until all 20 punches have been used. I expect to use up all punches over the next 5-7 years. I will compare the performance of this acct to my more "active" CAPs account, and see if this maxim proves correct.

Good, solid long-term performer selling at bargain prices. Railroads, even ones that move a lot of coal, are a crucial part of our economic structure. Here you get a 3%+ yield with a dozen years of annual increases at low valuations (P/E=11 and PE/Growth ratio is less than 1).

5 star caps screen ranked equally by gross margin, return on equity, price to book, and price to earnings. This was at the top end of the list. Using CAPS with Greenblatt methodology.

I bought shares of NSC on Wednesday the day before Thanksgiving. Enough said.

Disclosure: I own shares of NSC

Gettin' on the train now before it leaves the station...

Div

1) Part of economic recovery story
2) Great price at current value
3) Less expensive and unpredictable than traditional shipping

Natural Gas will offset coal and everyone has sold this along with coal. Buy it on the dip.

Buy a good company on the dip. Sounds like a recipe for success.

good transportation play

What has 800 wheels and a very modest P/E ratio?

low peg

Choo Choo. Bought in RL at 65.46.

oversold