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Why Genesee & Wyoming Stock Rose Last Month

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GWR’s stock price boost

The largest short line carrier in the US, Genesee & Wyoming (GWR), has operations in the US, Canada, UK/Europe, and parts of Australia. Though it doesn’t fall in that category, GWR has widely been compared with Class I railroads in the US.

In recent years, this railroad has consolidated its position in the industry through numerous acquisitions of small railroads. However, the company faced issues with the growth of its same-railroad operations. However, in the last two months, GWR’s same railroad operations have exhibited YoY (year-over-year) growth.

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The upward trend in GWR stock

On June 15, Genesee & Wyoming’s stock price closed at $81.93, up 1.7%. At present, the stock is trading very near to its 52-week high of $84.40. On June 15, the railroad’s market capitalization was $5.0 billion. The Connecticut-headquartered railroad doesn’t pay dividends unlike its US Class I railroad peers.

The company also delivered strong Q1 2018 results with double-digit revenue and adjusted earnings growth. Given the tax savings resulting from the implementation of theTax Cuts and Jobs Act, GWR has initiated a stock buyback. In the first quarter, Genesee & Wyoming bought back class A common stock valued $57.4 million, which resulted in the stock starting its upward journey. In the last year, GWR stock has delivered a 21.6% return. GWR’s returns compared to its peer group are as follows:

  • Norfolk Southern (NSC): 29%
  • CSX (CSX): 25%
  • Union Pacific (UNP): 31%
  • Kansas City Southern (KSU): 6%
  • Canadian Pacific Railway (CP): 25%
  • Canadian National Railway (CNI): 2%

In the last year, the SPDR S&P Transportation (XTN) returned 23%.

Series highlights

In this monthly series on Genesee & Wyoming’s freight volumes, we’ll go through the region-wise volume trends. At the end, we’ll turn to Reuters-surveyed analysts for their opinion on the railroad and its peer group.

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