Rail Traffic Signals Continued Recovery
- Posted by ToddSullivan
- on February 26th, 2013
It’s been a few weeks since I updated railroad data posts here so let’s take a look. Total N. American rail traffic came in a 689k cars last week, a 30K car YOY increase.
Now the common push back I get from those who doubt the rail data is signaling economic strength is “oil shipments from Bakken are the reason for the increase”. Lets look at the numbers. It is true, the “oil/chemical” category was up 7k carloads(56k-63k) last week, about a 12% increase over last year. BUT, that was wholly offset by the continued decline in coal shipments of 6k carloads (127k-121k) as utilities continue to switch to nat gas for generation. So, net/net the “energy effect” of coal to nat gas and increased Bakken oil production for the railroads has been negligible.
So that leaves us with only one scenario…… the economy continues to grow. In fact continued strength is seen in auto, metal, and stone & related products categories (think manufacturing and construction) which bodes very well going forward.
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Todd's investing strategy is essentially long with the rare short. He seeks to buy undervalued issues with an upcoming catalyst that will help them realized.... More »
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