Stifel, Nicolaus & Co. Analyst John Larkin says investors have been negative about railroads lately because of decreased grain and coal volumes. He says that is creating a buying opportunity for some stocks like Genesee & Wyoming Inc (GWR).
“The railroads are cheaper relative to their own valuation histories and relative to the broader market indices than they have been in quite some time,” Larkin says.
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Larkin says Genesee & Wyoming has been “slaughtered of late,” partly because of the iron ore mines that closed in Australia due to decreased demand from China. But, Larkin still has a “buy” rating on the stock.
“We continue to believe that Genesee & Wyoming is a very high-quality company that hasn’t been this inexpensive in a number of years,” he says.
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