Tickers in this Article: BBBY, HIT, KSU, CNI
While investing is not a game of timing market lows and market tops, the idea is to certainly buy a stock that you hope is heading up not down. That doesn't mean that the share price has to go up immediately upon purchase, but at the same time, you certainly don't want to buy shares only to have them drop significantly after purchase. While stock prices seem to be hanging out in an elevated plateau, these names could have some tailwinds left.

TUTORIAL: Investing Concepts

All Aboard
Of course one shouldn't build an investment decision on momentum or tailwinds, but rather tenets of value. Railroad stocks seem to offer both. As the economy continues to climb out of its funk, railroads are the first in line to benefit. Railroads are responsible for moving an economy's basic goods. More so, they can do so at a significantly lower cost than any other form of ground transportation.

Canadian National Railway (NYSE:CNI) and Kansas City Southern (NYSE:KSU) are two strong candidates to perform well over the next few years. CNI is Canada's largest railroad operator. It sports a market cap of $34 billion and a P/E ratio of 16. Kansas City is a small railroad by industry standards with a market cap of only $5 billion. Shares look expensive on a P/E ratio basis of 32 but profits are expected to accelerate over the years.

No Guarantees
Japanese conglomerate Hitachi (NYSE:HIT) has come under selling pressure in light of the tragedy in Japan. As such, investing in Japan may not seem timely today, but sometimes being a contrarian pays off. Trading at $50 a share, HIT trades for less than 9 times earnings. Profits may take a temporary hit but as a $22 billion conglomerate, Hitachi should be able to recover from any losses. (For more, see Investing Like A Contrarian)

Retailer Bed Bath and Beyond (Nasdaq:BBBY) stands out for its exceptional balance sheet and strong operating culture. Shares are now trading near a 52-week high thanks to a strong quarter. Yet the company still trades at a decent 16 times forward earnings and the balance sheet has over $3 billion in net cash against a market cap of $13 billion.

The Bottom Line
Any stock that qualifies as timely can easily be at the mercy of a market pullback. Always consider investing with a healthy dose of skepticism. (For more, see The Value Investor's Handbook.)

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