Summary
- Genesee & Wyoming is a railroad company with international exposure and yet is very seldom talked about.
- For investors looking at railroad stocks, GWR may offer a better alternative than the larger players.
- Eventually, the company could be an acquisition target due to its size.
Genesee & Wyoming (GWR) is an operator of short line and regional freight railroads. It has operations in North America, Australia, the UK, and Europe. The North American Operations segment includes operating regions that serves U.S. states and Canadian provinces. The Australian Operations segment provides rail freight services in South Australia, the Northern Territory, and New South Wales. The United Kingdom or European Operations segment handles the majority of the operations of Freight-liner Group. As the company has worldwide exposure, it is more vulnerable to the swings of global economies, unlike many of its American peers which are primarily domestic or just operate in North America. The company only has a $4.6 billion market cap, which may make it an attractive takeover candidate at some point in time. Until then, the company is an attractive holding for those looking for a railroad play in their portfolio.
Performance
In the most recently reported traffic reports by GWR, the company saw a decline in carloads versus the year earlier period. G&W's traffic in the fourth quarter of 2018 was 788,926 carloads, a decrease of 13,502 carloads, or 1.7%, compared with the fourth quarter of 2017. G&W's same railroad traffic in the fourth quarter of 2018 increased 16,905 carloads, or 2.2%, compared with the fourth quarter of 2017. Much of this was due to international weakness, pointing to the slowdown in the global economy.
