WAB was one of Saul’s big position last year. I am reading those posts.
there has been a pull back. trying to find the cause and may be invest
Any one still have it; appreciate any info
Thanks
usha
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Any one still have it; appreciate any info
Hi Usha, WAB is an excellent company that is on my radar too.
The issue right now that the rail roads are in secular decline. This is because they lost their best tow big clients:
- Coal — (Not coming back)
- OIL - (May not come back for a long time).
Their activity depends not only on Federal regulation but also on how well the rail roads are doing.
For me, I am waiting for the first promising quarter before I’ll buy into it.
Just my two cents.
Shuki
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WAB is an excellent company that is on my radar too.
The issue right now that the rail roads are in secular decline. This is because they lost their best two big clients:
1. Coal — (Not coming back)
2. Oil - (May not come back for a long time).
Their activity depends not only on Federal regulation but also on how well the rail roads are doing.
For me, I am waiting for the first promising quarter before I’ll buy into it.
Hi Usha, I agree with everything Shuki said.
Saul
Thank you both. So kind and helpful. very succinct
Coal not coming back-- agree
Oil is different matter.
Since the discovery of how to drill for oil in the 1800’s there has been a continued gradual increase in demand for oil Interrupted only briefly by recessions. But in the US that seems to have leveled off. Cars are not going to be getting worse milage, the number of cars in the US is not going to increase a lot, and drivers are unlikely to drive more. Then there is the coming of the electric vehicle. US consumption of oil (almost exclusively used for transport) seems likely to be on a secular declining trend that will persist.
While oil demand may or may not increase on less developed countries, US rail transport is mostly for US consumption of oil. The only way I can see for railroads in the US to grow oil shipments is if we send a lot of crude overseas. And counting shipping costs US crude oil will mostly be non competitive abroad.
So as far as fossil fuels go I see the decline as long lasting, probably permanent.
Add to that any secular decline in the whole rail concept, and the gradual spread of pipelines.Some future administrations will look on pipelines more favorably than the present one. Because they make economic and environmental sense compared to rail.
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