Hi all, I am new to this board but I went over the 28 page (post 9939) and read and I think I understand it.
You must agree that UNP is a great company with a huge moat.
I went over the earnings for the last 2.5 years this is what I have (with adjusting to the stock split that happened 2Q 2014):
1Q 2013 1.015
2Q 2013 1.175
3Q 2013 1.24
4Q 2013 1.275
1Q 2014 1.19
2Q 2014 1.43
3Q 2014 1.53
4Q 2014 1.61
1Q 2015 1.30
2Q 2015 1.38
TTM
4Q 2013 4.705
1Q 2014 4.88
2Q 2014 5.13
3Q 2014 5.42
4Q 2014 5.76
1Q 2015 5.87
2Q 2015 5.82
2Q 2015/ 2Q 2014 = 1.13 13% growth
1Q 2015 /1Q 2013 = 1.20 20% growth
4Q 2014 /4Q 2013 = 1.22 22% growth
As you can see the growth in EPS is declining. This is due the death of coal and slowdown in oil transports and agricultures.
Coal is probably not coming back but oil and agricultures sure!
The last read on EPS growth is 13%.
UNP yields 2.45% if you add this to the EPS growth one gets:
13+2.45 = 15.45%
The PE of UNP is 15…
I have no doubt that UNP is one of the best companies out there.
It has a huge moat and great management and also a great long term prospects.
The question is it a buy now according to Saul method?
Should I wait for the EPS growth rate to stabilize and grow again?
Thanks for your response.
Shuki