Loop Capital Rides Rail Stocks Following Pershing's Canadian National Exit

The rail sector is often ignored by investors given the complexity of the industry. However, this may prove to be a mistake, as the sector could offer attractive returns.

Loop Capital Markets initiated coverage of the rail sector On August 1 with a mostly Neutral stance. Analysts slapped Hold ratings on most names in the group except for one company given a Buy rating.

(Click to enlarge)

5-Day And Year-To-Date Performance

Here is a quick snapshot of how rail stocks have performed.

1. Norfolk Southern Corp. (NYSE: NSC) lost 4.77 percent over the past five trading sessions, but shares are higher by 3.57 percent since the start of 2016.

2. CSX Corporation (NASDAQ: CSX) lost 1.51 percent over the past five trading sessions, but shares are higher by 8.09 percent since the start of 2016.

Related Link: Railway Takeaways From Citi Industrials Conference

3. Canadian Pacific Railway Limited (USA) (NYSE: CP) lost 3.96 percent over the past five trading sessions, but shares are higher by 12.21 percent since the start of 2016.

4. Union Pacific Corporation (NYSE: UNP) lost 0.17 percent over the past five trading sessions, but shares are higher by 18.5 percent since the start of 2016.

5. Kansas City Southern (NYSE: KSU) lost 1.52 percent over the past five trading sessions, but shares are higher by 29.06 percent since the start of 2016.

Outlook

Four out of the five names under Loop Capital's coverage reported second-quarter results in which earnings per share exceeded analysts' expectations. The exception came from Union Pacific, which reported its earnings per share of $1.17 matching analysts' expectations.

Separately, analysts at UBS suggested on Thursday that Bill Ackman's Pershing Square hedge fund's move to completely exit its stake in Canadian Pacific could be seen as being "constructive" to the stock.

The table was provided by Benzinga Professional, a premium service that provides traders and investors with real-time headlines and analysis covering earnings reports, M&A, IPOs, rumors and much more.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!