Subman posted an excellent overview of NYRR at the Raging Bull. Here it is:
By: subman
Reply To: 1083 by vdobill
Wednesday, 28 Apr 1999 at 6:39 PM EDT Post # of 1121
To all,
I went back 12 months to look at the trade patterns. This stock is positioned for a breakout(i.e. +50 cents). With 10 mil in volume, the Wall Street boys will look at this as SERIOUS for the first time.
And well they should. For the uninitiated, here's the mix that makes this stock break 50 cents fast: CSX and NS are dueling over the NY/NJ turf. Operations are slated to start June 1. He who takes the high ground wins. New York City IS the high ground. NYRR is literally the only game in town (location, location, location), the cheapest fastest way to get a frieght car in and out of the city. AND ITS EXCLUSIVE thru its utility permit.
On top of that, there WILL be a settlement since the lawsuit is VALID! (and that's a potential $900 million in punative damages!). NYRR is aiming for 20 cents on the dollar to settle.
Figure five-to-ten cents is more realistic for a quick deal. That's between $50 and $90 million in the coffers, which, alone, will raise the share value between 40-and-80 cents a share.
Right now Conrail (which really is the same as CSX and NS) is saying "Why pay them $90 million, when we could buy them for $100 million? But that won't happen. Instead a cash-and-contract deal is being worked out giving NYRR hard currency paid out over a period of time, guaranteed business with huge expansion potential, and some trackage
rights to Long Island. But, there's more... Remember our new CEO? Where is he? He (or she) will be selected as a result of the
settlement talks. Why? Because deals are being made fast and furious all thoughout the rail industry right now. Alliances are being formed and broken, lines are being drawn, and that's partly why transportation stocks are booming. There is a fundamental re-structuring of EVERYTHING, and its triggered by the Conrail breakup. Its the wild west, boys, and NYRR is the only saloon in New York City
But that's not all...NYRR is staking out its turf in no uncertain terms. The purchase of the NJ trucking firm is basically to put NS and CSX on notice that NYRR is in the game and ready to play. There will be no cheap takeover or buyout. The lawsuit protects NYRR from that, and perhaps that's its most valuable contribution. The big boys can't run roughshod over this tiny family business. They must treat it with R.E.S.P.E.C.T. Even Crawford, that gnarly old curmudgeon, hated by most everybody, will get his share of respect, and profits. Then he'll
get out with a bundle and move on to the software business.
Now, what about timing? My prediction is that things are going to move fast. This won't be a slow, on-again-off-again process dragging out for months. This is going to rock, and within 60-to-90 days, its all going to be over. Those who grab shares quickly, will do very well. Those who say, "I'll wait til' June, will be sorry. I predict the price will be between .75 and $1.50 by then. That's how much this RR is worth to the overall scheme of things.
Let the games begin!
Subman |
