January 15, 2007: On the right track..engines
TRAIN ENGINES:
One of the "signals" of economic health is the amount of traffic on our nation's railways. I thought it would be appropriate to briefly report on this topic to you.
At the present time, I do not own any singleton railroad stocks. A few are tucked away in some ETF, but nothing of any significance. If I were to recommend railroads at this time, I would Canadian National Railway (CNR), Norfolk Southern (NSC) and Union Pacific (UNP) on a valuation basis. Lower energy costs plus stable rail traffic volume indicated a good year ahead for these railroads. Actually, all publicly traded railroads will benefit from the aforementioned to a degree. Maybe there is an idea for an ETF here.
Class 1 traffic volumes were reported by some wishing for bad economic news to be down the first week of January. True, volumes declined year-over-year, but there was one less day to measure as New Year's Day fell on Monday vs. Sunday last year. Motor vehicles, forest products and metallic ores and minerals fell in traffic volume,but that is a seasonal expectation in my view. Export and import traffic was stable. Other traffic was stable to slightly up.There is no sign of a recession based upon the data I reviewed, which you might apply to your portfolio considerations.
Of special interest, Union Pacific announced late last week that it is going to invest over $60m over the next two years on maintenance and improvements on eighty miles of track in the L.A. Basin. The L.A. Basin accounts for roughly 25% of UNP's originated and terminated traffic.I recall the major problems railroads were having in delivering timely services a few years ago. By in large, infrastructure of the rail lines has significantly improved. The UNP effort in the L.A. Basin bodes well for that company (and stock) over the long haul.
SEARCH ENGINES:
Total US internet search engine queries in December grew 0.9% month-to-month
and 30% tear-to-year. Google gained another 40bps of market share month-to-month while Yahoo also took 30bps of share. Losers were MSN -50bps, AOL -20bps and Ask -10bps. Google will likely see stronger international gains as well. Yahoo worldwide will likely be flat, according to projections I have seen.
Search engines will remain the strongest performing segment of the online ad market in 2007.
Google is the on its way to completely dominating the search engine market.It has 47% of the domestic search market and 65% of the international search market. I believe that a stock price of $600.00 is not out of the realm of possibility for Google. Or so say the seasoned analysts.
And talk about brand name recognition...Google is right up there with Kleenex. I suspect many ad agencies would kill to have their products in that class.
One of the "signals" of economic health is the amount of traffic on our nation's railways. I thought it would be appropriate to briefly report on this topic to you.
At the present time, I do not own any singleton railroad stocks. A few are tucked away in some ETF, but nothing of any significance. If I were to recommend railroads at this time, I would Canadian National Railway (CNR), Norfolk Southern (NSC) and Union Pacific (UNP) on a valuation basis. Lower energy costs plus stable rail traffic volume indicated a good year ahead for these railroads. Actually, all publicly traded railroads will benefit from the aforementioned to a degree. Maybe there is an idea for an ETF here.
Class 1 traffic volumes were reported by some wishing for bad economic news to be down the first week of January. True, volumes declined year-over-year, but there was one less day to measure as New Year's Day fell on Monday vs. Sunday last year. Motor vehicles, forest products and metallic ores and minerals fell in traffic volume,but that is a seasonal expectation in my view. Export and import traffic was stable. Other traffic was stable to slightly up.There is no sign of a recession based upon the data I reviewed, which you might apply to your portfolio considerations.
Of special interest, Union Pacific announced late last week that it is going to invest over $60m over the next two years on maintenance and improvements on eighty miles of track in the L.A. Basin. The L.A. Basin accounts for roughly 25% of UNP's originated and terminated traffic.I recall the major problems railroads were having in delivering timely services a few years ago. By in large, infrastructure of the rail lines has significantly improved. The UNP effort in the L.A. Basin bodes well for that company (and stock) over the long haul.
SEARCH ENGINES:
Total US internet search engine queries in December grew 0.9% month-to-month
and 30% tear-to-year. Google gained another 40bps of market share month-to-month while Yahoo also took 30bps of share. Losers were MSN -50bps, AOL -20bps and Ask -10bps. Google will likely see stronger international gains as well. Yahoo worldwide will likely be flat, according to projections I have seen.
Search engines will remain the strongest performing segment of the online ad market in 2007.
Google is the on its way to completely dominating the search engine market.It has 47% of the domestic search market and 65% of the international search market. I believe that a stock price of $600.00 is not out of the realm of possibility for Google. Or so say the seasoned analysts.
And talk about brand name recognition...Google is right up there with Kleenex. I suspect many ad agencies would kill to have their products in that class.
posted by T @ 1/15/2007 02:22:00 AM
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