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Strategies & Market Trends : Value Investing

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To: - with a K who wrote (28668)	10/23/2007 1:24:43 PM
From: E_K_S	Read Replies (1) of 78669

Hi -with a K CSX Corp. (CSX) is another railroad you might want to look at too. The long term price movement is similar to BNI. finance.yahoo.com^gspc;charttype=line;crosshair=on;logscale=on;source=undefined I think the fundamental valuation for CSX is a bit more attractive than BNI. It appears that the market has discounted CSX value because of a non functional board and inexperienced management. According to CSX's largest shareholder TCI, CSX management ``does not fully understand the economics of the business' and is ``cavalier about potential risks' and ``undisciplined about spending,' bloomberg.com The value proposition is that their operating inefficiencies can be fixed by bringing in more experienced management or perhaps even merging with one of the other top railroad operators. The risk is if current management goes on a spending spree to satisfy wall street and make lousy strategic long term capital investments. From my brief review of CSX's non core assets, they could sell their Greenbrier Hotel resort for over $700 million (worth a few dollars a share) and deploy this capital into their core business by upgrading their infrastructure with new more efficient engines and rail cars. They announced earnings 10/16/07 which were up 25% but probably from a low base. I think Buffet likes BNI because their management is top notch. EKS

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