Monday, March 23, 2009

Louis Navellier and NSC

October 2008

This month, I want you to make four purchases: General Mills (GIS), Norfolk Southern (NSC), Northern Trust (NTRS) and Walmart (WMT). These companies will add breadth to our portfolio—in addition to positioning us to profit!

Norfolk Southern (NSC) transports freight over a network consisting of more than 21,000 route miles in 22 states in the eastern U.S. and in Ontario, Canada. This rail system is made up of more than 16,000 route miles owned by Norfolk Southern and about 5,000 route miles of track rights, which allow the company to use tracks owned by other railroads.
That’s enough track to travel from New York City to Melbourne, Australia—twice! As more companies turn to railways as a fuel-efficient way to transport their products, demand for freight trains is soaring.
That’s why we’re adding NSC to our other transportation picks, CSX Corp. (CSX) and Union Pacific (UNP). Norfolk Southern’s latest quarterly earnings were 12.6% higher than analysts’ consensus estimates thanks to rising rates and increased demand, and this trend is sure to continue into 2009. This Conservative stock is a great buy below $73, currently trading at barely 13 times forecasted earnings!

Buy Price: $67.97
Buy Below: $93
Buy Below: $73 [yes, there are both $73 and $93 in the same issue...]

November 2008

This months Top Stock #3
Norfolk Southern (NSC), another rail carrier, also makes the Top 5 for the same reasons as CSX. According to the Association of American Railroads, metal shipments in the third quarter increased by 16.2%, and coal carloads rose by 4.1%. While its true that overall carloads for the quarter were down about 1%, drastic drops in diesel prices are helping to boost NSC’s bottom line. Fuel prices dropped more than 20 cents a gallon last week alone.

Buy below $60

December 2008

This months Top Stock #3
Norfolk Southern (NSC) transports freight over a network consisting of more than 21,000 route miles in 22 states in the eastern U.S. and in Ontario, Canada. The company posted an earnings surprise of more than 13% for the third quarter even as economic hardships cut into consumer spending and U.S. exports. As the economy recovers, NSC will see its profits surge due to even more business.

Buy below $54

January 2009

Buy below $48

February 2009

Buy below $39

March 2009

You may be wondering why we are selling these two railroad stocks but not Norfolk Southern (NSC). Well, I still would like to keep one rail company in our portfolio because I expect this sector to do well across 2009. What Saudi Arabia is to oil, the U.S. is to corn and coal and I expect demand for these exports to soar this year as the dollar weakens.
That logically means more rail traffic from America’s interior to its ports. Since the fundamentals of CSX and UNP are much weaker, we’ll trim those two and hold on to Norfolk Southern to take advantage of this trend.

Buy below $36

April 2009

We sold our other railroad stocks last week, but I was holding on to NSC in anticipation of a weaker dollar and an increase in exports.
Unfortunately, the dollar has remained stubbornly strong and we can’t afford to wait now that the stock has weakened to a C. Sell this stock and move into a company that will do better in the near term like our new buy.

Sell price around $31.04

Performance: -54%
S&P500 in the same period: -40%

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