Eastern Railroad Discussion > Yet another CSX investment angle

Barron's magazine has an article about how professional investors are playing the next few months in CSX stock price. CSX has a two day investor meeting scheduled for the end of October. Hunter Harrison and others are expected to update investors about progress toward precision railroading, and offer guidance for the next year. That meeting may tip the stock up or down.

The magazine notes that CSX has not seen an increase in price like EHH created at Canadian Pacific. The stock is up about 18%, and is down a few bucks from the EHH-peak of $55. The company has also decided to add a billion dollars of share owner funds to buy back more stock from current share owners.

JP Morgan has been a supporter of Harrison, and they're optimistic about CSX eventually coming out ahead on the precision railroading concept. Their options strategist is suggesting a sell the put, and buy the call strategy. This takes advantage of the growing skepticism that things will get better quickly (the writer collects a fee from people who are scared about losing some of the stock value), while the same individual or fund could pay a fee to participate in gains over $55 between now and the end of November. This isn't a recommendation, of course. It's a description of how some major money managers may be laying bets on CSX share price movements in the next 60+ days.

Investment banks advising pension plans, college endowments, and other pools of money have been excited and scared about CSX. As they change their view on the company, tens of thousands of shares will change hands. Insiders like Harrison and Mantle Ridge are locked in for several years, and can't sell.


(Barron's is a paywall site, but the content usually shows up online in a day or two)

Fine summary. Alternatively you can buy Barrons at the newsstand or most major library have a subscription if you would like to read the article.
While I suspect that most rail fan aren't interested in option strategies, it certainly is relevant since option traders are very focused on a company's probable success or lack thereof. EHH is not in the entertainment business.
Going trackside and watching the trains roll is a lot more fun than staring at a computer screen trying to evaluate a November 55 Call.

Yes.

There is a mantra around here that "Wall Street wants" this or that.

It is sometimes useful to see what Wall Street expects to happen. Money talks...

Posted from Android

Lackawanna484 Wrote:
-------------------------------------------------------
> Yes.
>
> There is a mantra around here that "Wall Street
> wants" this or that.
>
> It is sometimes useful to see what Wall Street
> expects to happen. Money talks...
>
> Posted from Android

And Wall St. is ruining this country....

bluesboyst Wrote:
-------------------------------------------------------
> Lackawanna484 Wrote:
> --------------------------------------------------
> -----
> > Yes.
> >
> > There is a mantra around here that "Wall Street
> > wants" this or that.
> >
> > It is sometimes useful to see what Wall Street
> > expects to happen. Money talks...
> >
> > Posted from Android
>
> And Wall St. is ruining this country....

It's all about moving money around and gambling now to get rich quick. I think the days of building strong companies in the US are gone (except maybe in the hi-tech area). Some companies, like Amazon, are lucky in that they can still largely ignore Wall Street and keep putting the money and resources back into the company to build and grow it. Most publically traded companies in the US are not that lucky now days.

Wall Street's expectations do not always come to fruition. Whether or not they pan out here is yet to be seen.
ALLEN