The federal vaccine mandates are about to be universally enforced at the nation's largest Class I rail operators. It's key to note that about 43-45% of all intercity freight is by RAIL. The information linked here and described are both from Norfolk Southern, the rail, operator within which I have many personal friends and contacts. All of the major North American rail operators are also under federal contracts, and as such are subject to the vaccination mandates. Norfolk Southern is in process of announcing this mandate to union employees, as are the other rail operators, and it looks like December 8th will be the date by which employees must be compliant. My contacts are telling me that outside of corporate, there are expected to be MANY critical train and railway operations workers who will not comply and will not be able to work. The rail operators are for the most part very highly automated from an operational perspective, so the maintenance and operations folks on the ground who work on the tracks, trains, and load/unload/multimodal operations are ALL basically at minimal staffing levels already (to maintain optimal Operating Ratios), and would be highly sensitive to any significant staffing shortages. These are all highly skilled positions, and almost all are union jobs - many of these roles perform mandatory safety operations and are critical to being able to operate under current rail transportation safety regulations and laws. If you look at the railroad operator's maps, Norfolk Southern (and CSX) basically own/run ALL of the track East of the Mississippi. All of the people I know at Norfolk Southern are VERY concerned about what could happen after Dec. 8th, and have advised me to do as they're doing, and stock up on essentials as December and early 2022 could see huge additional impacts to supply chains if rail transportation stops or slows significantly. One rail operator's inability to operate will affect all of them.
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This is one of a series of posts where I will apply my fast and dirty historical fundamental analysis to some of the biggest dogshit stocks of 2021. If you are interested in the process I use below to evaluate a stock, check out How Do I Buy A Stonk???
The Business
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Aurizon traces its roots back to Queensland Rail, whom were founded in 1865 when the State government endeavoured to link up the scattered towns along Queensland’s coast. Over the many years of their operations, they established bulk and container transport business. In 2004, these divisions were split off from Queensland Rail under the banner of QR National and was subsequently floated on the ASX on 2010, and rebranded as Aurizon in 2012.
Since then, Aurizon has focused its business to coal & bulk transport only, cutting loose its intermodal container business. It has also expanded its footprint to include major networks the other States like NSW and WA. Aurizon has grown to be the largest rail-based transport businesses in Australia.
The Checklist
- Net Profit: positive 10 of last 10 years. Good ✅
- Outstanding Shares: trending down (!) L10Y. Good ✅
- Revenue, Profit, & Equity: R & NP stagnant, E trending down. Neutral ⚪
- Insider Ownership: 1% w/ absolute ton of on-market buys. Good ✅
- Debt / Equity: 92% w/ Current Ratio of 1.1x. Neutral ⚪
- ROE: 10.3% Avg L10Y w/ 12.8% FY21. Good ✅
- Dividend: 7.0% 10Y Avg Yield w/ 8.5% FY21. Good ✅
- BPS $2.32 (1.5x P/B) w/ NTA $2.3 (1.5x P/NTA). Good ✅
- 10Y Avg: SPS $1.82 (1.9x P/S), EPS 29.8cents (11.4x P/E). Good ✅
- Growth: -(2.0)% Avg Revenue Growth L10Y w/ -(1.9)% FY21. Neutral ⚪
Fair Value: $4.91
Target Buy: $3.72
Looks like a very solid reliable business overall. Probably no surprises here, given its position essentially as a monopoly in its industry. I should note that the growth as neutral in large part because the share buybacks have been able to keep pace with the slight decline in nominal revenue.
The Knife
[marketindex.com.au](ht
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Statement from the Secretary of State for Transport on High Speed Rail
Deputy Speaker,
As promised to the House and to the Right Honourable Member for Merseyside in previous sessions of Minister’s Questions, this statement shall cover the high speed rail projects currently being undertaken as well as the future of high speed rail in the UK, including progress updates on High Speed 2, announcements on the future of the eastern leg of HS2, plans for the future Northern Powerhouse Rail and future high speed rail projects.
First of all is the primary reason for this statement, the future of high speed rail in Great Britain. As we speak, progress is being made on Phase 1 of High Speed 2. Tunnel boring machines are active in Buckinghamshire, foundations have been laid for stations and viaducts and earthwork is taking place to make the route come to fruition. There is obviously still a long way to go before HS2 Phase 1 is completed, but we are confident that with the proper funding and oversight, we can have Phase 1, as well as Phase 2a, which comprises the section between the junction with the West Coast Main Line at Lichfield and Crewe, completed by 2026.
On Phase 2b, the western leg from Crewe to Manchester Piccadilly via Manchester Interchange station adjacent to Manchester Airport and including a leg to connect to the West Coast Main Line near Golborne is planned to begin construction in 2030 should Phases 1 and 2a go to plan, with plans to open by 2035 at the latest. My department is planning on the submission of a hybrid bill for the western leg either late next year or in 2023 with a public consultation period on our final plans to be open until late 2024 with final publication of plans to be done in 2025 or 2026, subject to the findings of the consultation. In can also confirm to the House, that as part of the works for the western leg, there will be provisional work done for the western section of High Speed 3, including a junction for the future joining of the HS3 route to Liverpool to the HS2 line between Manchester Interchange and Manchester Piccadilly, provisions for a second pair of tunnels under Manchester and preparatory works for 4 new underground platforms at Manchester Piccadilly for HS3.
Now, the eastern leg has come under great scrutiny as of late due to delays to Phase 1 and other factors such as a lack of an interchange in Sheffield - which was originally promised but later cut. I have always been an advocate for this interchange in
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