Canadian Pacific Railway
The railway company has a presentation planned Tuesday for investors and analysts.
"We continue to believe that a 65% OR in 2015 (Pershing and Mr Harrison's target) is largely factored into CP's current price, and that the stock is trading near the high end of our comfort zone," Desjardins Capital Markets analysts wrote in a March 23 report. "We reiterate our Hold-Average Risk rating. Based on 2015 consensus EPS (which assumes a 69.6% OR), the stock is trading at a P/E of 10.5x, above its peer average of 9.8x (8.3x excluding CN and KSU). Based on our rough estimate of C$8.81 EPS for 2015 (assuming a 65% OR), we derive a P/E of 8.9x, which is largely in line with peer valuations but entails a higher level of risk. We continue to prefer CN over CP for 2012, as we believe there is greater potential upside for CN at current levels, given its growth opportunities (refer to our Morning Pulse comment dated February 13, 2012 for details), top-notch management and stronger balance sheet." Forward Annual Dividend Yield: 1.6% Rated "A- (Buy)" by TheStreet Ratings: The company's fourth-quarter gross profit margin decreased from the prior year. Canadian Pacific Railway has very weak liquidity. Its Quick Ratio is 0.47, which demonstrates a lack of ability to meet its short-term cash needs. In the fourth quarter, stockholders' net worth decreased 3.64% from the prior year. TheStreet Ratings' price target is $90.19. The stock closed Monday at $79.69 and has risen 17.76% year to date.Focus Media The digital media company reported on March 19 fourth-quarter earnings of $75.4 million, or 57 cents a share, up from year-earlier earnings of $47.2 million, or 35 cents a share. "We are particularly positive on margin improvement in poster frame business," JPMorgan analysts wrote in a report Monday. "FMCN maintains earlier expectation that 2012 YoY revenue growth would be ~20%-25%. Given good value of its platform and attractive valuation, we upgraded FMCN to OW, with Dec-12 PT of US$36." Forward Annual Dividend Yield: 1.6% Rated "B (Buy)" by TheStreet Ratings: The company's fourth-quarter gross profit margin increased from the previous year. Focus Media Holding is extremely liquid. Its Quick Ratio is 2.76, which shows the company can meet its short-term cash needs. In the fourth quarter, stockholders' net worth increased 7.57% from the prior year. TheStreet Ratings' price target is $32.68. The stock closed Monday at $28.44 and has risen 45.92% year to date.
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