Kansas City Southern Inc. (KSU): 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.

Kansas City Southern ( KSU) pushed the Transportation industry lower today making it today's featured Transportation laggard. The industry as a whole closed the day down 0.3%. By the end of trading, Kansas City Southern fell $2.32 (-2.8%) to $81.10 on light volume. Throughout the day, 574,892 shares of Kansas City Southern exchanged hands as compared to its average daily volume of 857,400 shares. The stock ranged in price between $81.03-$83.98 after having opened the day at $83.53 as compared to the previous trading day's close of $83.42. Other companies within the Transportation industry that declined today were: Patriot Transportation Holdings ( PATR), down 9%, Golar LNG Partners ( GMLP), down 5.6%, GasLog ( GLOG), down 5.4%, and Ultrapetrol Bahamas ( ULTR), down 5.3%.
  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Kansas City Southern, through its subsidiaries, engages in the freight rail transportation business. Kansas City Southern has a market cap of $8.85 billion and is part of the services sector. The company has a P/E ratio of 23.3, above the S&P 500 P/E ratio of 17.7. Shares are up 18.3% year to date as of the close of trading on Thursday. Currently there are nine analysts that rate Kansas City Southern a buy, one analyst rates it a sell, and six rate it a hold.

TheStreet Ratings rates Kansas City Southern as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the positive front, Overseas Shipholding Group ( OSG), up 17.8%, Sino-Global Shipping America ( SINO), up 13.1%, FreightCar America ( RAIL), up 8.8%, and FreeSeas ( FREE), up 8.7%, were all gainers within the transportation industry with United Continental Holdings ( UAL) 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).

FREE for a limited time only: Get TheStreet Ratings #1 Stock Report NOW!.

If you liked this article you might like

Can CSX Catch Up to the Other Rails?

This Railroad Wants to Give You Part of $800 Million

Cramer: Can the Pummeled Transports Get Back on Track?