To: Sergio H who wrote (45672 ) 11/27/2011 5:15:19 PM From: E_K_S 1 Recommendation Read Replies (1) | Respond to Is there a Value Opportunity for different services in the growing domestic shale sector? Here are some value companies I have on my watch list. The value opportunity might be in the rail transportation and/or service to that sector.GATX Corp. (GMT) - good value candidate but perhaps too much Europe & India exposureNorfolk Southern Corp. (NSC) - Value candidate reasonable PE @ 13.24 good debt profileCanadian National Railway Company (CNI) - Value candidate PE @ 14.5 excellent debt profileUS Ecology, Inc. (ECOL) - 80 company owned rail cars valued at $17M (25% of BV) could possibly provide environmental services if/when EPA require "clean" effluent standards. - Possible Value BuyCARBO Ceramics Inc. (CRR) - Speculative "pure" play providing well development/environmental services. High PE, high margins - Not in my Value zone.r lington Northern Santa Fe gets a lot of activity moving both Oil and LNG rail cars. These are the rail companies on my watch list: UNP (PE=15.26), CNI (PE=14.42), CSX (PE=12.49) , NSC (PE=13.74) & CP (PE=16.73). Norfolk Southern Corp. (NSC) has an excellent debt profile w/ only 3.87x net annual income /LT debt coverage, have service routes through the Southeast and Midwest and connections to both the Atlantic and Gulf ports. This is my top pick for the U.S. rails. It's expensive on a BV basis selling at 2.3X BV. NSC operates at 28.4% operating margins which is inline with the other U.S. carriers.Canadian National Railway Company (CNI) is my top Canadian rail pick, They operate track that spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico. They have higher operating margins (almost 10% higher) than the U.S. operators. They have the best LT Debt profile I have seen of the group w/ annual net earnings to LT debt at 2.7X. Their EPS growth estimates over 5 years are 2x higher than NSC at 10%.
