Depending how we look at business lines, I see three stocks related to transportation - CSX, F and maybe CMI could be classified as such. F seems to me by far the weakest in terms of having a moat. Making cars is a tough business, and F is up against formidable competitors like Hyundai, Toyota (emerging from their slump),Honda, BMW, Daimler and VW. I don't see tham being top at anything and if we ever learned anything from Buffet, do we really want to own a mediocre company in one of the thoughest business there is?
I do like SPLS as a pick, since they own their category and have a strong internet business and a good valuation. It's the only retail playput out here and well worth a consideration, plus is somewhat contrarian too, which I like.
SE may be a short. They make a lot of their money processing liquids and some of their contracts are percentage of proceeds (POP). They lost a significant part of their earnings power in 2008, when NG liquids tanked, because demand from chemical plants went south. This could happen again. I do like the company, but I would not want to own it for a year or so. I think we will see a better harvest dor ADM before the oversupply of liquids is worked out, which may take years. |
