Kansas City Southern Inc. (KSU): Today's Featured Transportation Winner

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 higher today making it today's featured transportation winner. The industry as a whole closed the day up 1.5%. By the end of trading, Kansas City Southern rose $3.92 (3.6%) to $111.45 on light volume. Throughout the day, 779,089 shares of Kansas City Southern exchanged hands as compared to its average daily volume of 1,151,600 shares. The stock ranged in a price between $106.94-$111.75 after having opened the day at $107.53 as compared to the previous trading day's close of $107.53. Other companies within the Transportation industry that increased today were: Air Transport Services Group ( ATSG), up 10.8%, Teekay Tankers ( TNK), up 6.9%, Era Group ( ERA), up 6.4% and DryShips ( DRYS), up 5.1%.
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Kansas City Southern, through its subsidiaries, engages in the freight rail transportation business. Kansas City Southern has a market cap of $12.0 billion and is part of the services sector. The company has a P/E ratio of 29.6, above the S&P 500 P/E ratio of 17.7. Shares are up 28.8% year to date as of the close of trading on Wednesday. Currently there are 6 analysts that rate Kansas City Southern a buy, 2 analysts rate it a sell, and 8 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 impressive record of earnings per share growth, compelling growth in net income, revenue growth, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the negative front, FreeSeas ( FREE), down 7.7%, Torm A/S ( TRMD), down 3.6%, Guangshen Railway Company ( GSH), down 3.1% and Vitran Corporation ( VTNC), down 3.0%.

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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