Norfolk Southern Corporation (NSC): Today's Featured Transportation Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Norfolk Southern Corporation ( NSC) pushed the Transportation industry lower today making it today's featured Transportation laggard. The industry as a whole closed the day up 0.8%. By the end of trading, Norfolk Southern Corporation fell 92 cents (-1.5%) to $61.35 on heavy volume. Throughout the day, four million shares of Norfolk Southern Corporation exchanged hands as compared to its average daily volume of 2.4 million shares. The stock ranged in price between $61.28-$62.89 after having opened the day at $62.78 as compared to the previous trading day's close of $62.27. Other companies within the Transportation industry that declined today were: FreeSeas ( FREE), down 13.2%, Overseas Shipholding Group ( OSG), down 8.9%, Vitran Corporation ( VTNC), down 7.3%, and Sino-Global Shipping America ( SINO), down 5.3%.
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Norfolk Southern Corporation, through its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods primarily in the United States. Norfolk Southern Corporation has a market cap of $20.06 billion and is part of the services sector. The company has a P/E ratio of 11.4, equal to the average transportation industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are down 13.8% year to date as of the close of trading on Tuesday. Currently there are nine analysts that rate Norfolk Southern Corporation a buy, no analysts rate it a sell, and 16 rate it a hold.

TheStreet Ratings rates Norfolk Southern Corporation as a buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the positive front, Excel Maritime Carriers ( EXM), up 12.9%, YRC Worldwide ( YRCW), up 10.6%, Arkansas Best Corporation ( ABFS), up 7.9%, and Swift Transportation ( SWFT), up 7%, were all gainers within the transportation industry with FedEx Corporation ( FDX) being today's featured transportation industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the transportation industry could consider iShares Dow Jones Transportation ( IYT) while those bearish on the transportation industry could consider ProShares UltraShort Industrials ( SIJ).

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