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Now siding after all (CNR)

Yesterday I decided to part with my position at a slight loss. $CNR (+0,37%) position with some loss... 🚋

As one of my first major investments and also intended as a long-term position, I decided to do so at the time after only a brief look at the superficial key figures. I wasn't really involved here yet and was in the "just try it out" phase. Of course, I also paid far too much for the paper... 😥

Due to the fact that I am taking my journey in the stock/investing universe more and more seriously and I am constantly trying to sift through more information and evaluate it better in order to make informed decisions. Yesterday I decided to draw the line here, mainly due to the management:

When Tracey took over Q1/22 it looked something like this:

EPS C$1.32 // long term debt C$13.383M // net debt to EBITDA 1.92 // shares out 700M

Arrived today in Q3/25:

EPS C$1.87 // long term debt C$21.120M // net debt to EBITDA 2.54 // shares out 620M

Only 6% growth was reported for earnings, and CAPEX of C$2.8B was announced again. The outlook remains at the lower end of the range with mid to high single digit EPS growth...

In addition, there is also the increased pressure from direct competition from CPKC.

During this time, around $8B in new debt was raised (at fairly high interest rates) to buy back shares at the highest valuation. At the same time, the growth prospects are not really exciting and there is a lot of turnover in the management team.

For me, the new M-team does not seem to be really experienced and the handling of the capital allocation is more than questionable.

That's why I'm calling it a day for now ❌

In any case, I've learned something again with this stock and hopefully I can and will project this into the future. I'm now taking much more time with the evaluation and can hold back instead of immediately dumping my money into the market (individual stocks).

I haven't quite thought about where to allocate the money I've freed up yet, but I'm already interested in taking a position in $CP (+2,51%) or possibly $UNP (+1,23%) build up.

I know it's looooong 😂But the valuation of $CP (+2,51%) is currently coming down even further, the growth story seems interesting and the management also looks good.

I may also use the money freed up to increase other positions in the portfolio, we'll see.

Do you have any tips or experience in this regard? Do you check the figures first or whether the management can/will deal with them?

04.11

Canadian National Railway

Vendido x34 em € 83,12

€ 2.826,08

15,23%

3 Comentários

Dividenden@Rente@userc7b02065b8a7407b

14H

The development is certainly not encouraging. I am also invested in CNR and am sitting on a high purchase price. I think it is difficult to blame everything on the new management. At least 10% of the price loss is due to the fall in the CAN$ exchange rate. Ynnxs wrote a good article on this 3 months ago. You don't know beforehand that you buy shares at the high. If you do, I would like to have a crystal ball. One should also not forget that Donald T. is working his way through Canada in terms of customs. Obviously the YoY development at CN is about worse than at CP. I haven't looked at all the balance sheets yet, but as of 9/30/2025, liabilities are up only slightly compared to 12/31/2024. Liabilities up CAD 4B from 2023 to 2024, with fixed assets up CAD 5B. That looks like investment. A railroad is capital intensive. Nevertheless, I will keep an eye on the management, even if it is difficult to understand from here.

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Stocktective@Stocktective

12H

@userc7b02065b8a7407b Thank you for your feedback, very interesting.
Maybe you misunderstood me a bit, I didn't just want to blame the management for everything.
Of course the business is cost-intensive, the K-economy is not looking good at the moment, the tariffs are also putting pressure on Canadian values, the currency etc. is all correct.
I'm still of the opinion that $CNR is still a great company and I think that it can all be sat out without stress. The dividend is decent and I hope they won't cut it.
I originally wanted to buy more - but for me the key point here was simply how the management handles the money.

High or higher CAPEX would not be a problem for me either if there is a profit in the future. The buybacks were absolutely unacceptable. And the outlook even from the management is rather subdued to poor.

Unfortunately, I have already experienced for myself that everything can stand or fall with the management. Personally, I am not satisfied with $CNR in this respect and have therefore sold.

Of course, I could be massively wrong, so be it. But if you've seen it, I've already invested in this sector again $CP. So I think it will go up again in the next few years.

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Dividenden@Rente@userc7b02065b8a7407b

10H

@Stocktective Yes, I agree that management is crucial. I also think that prices may have bottomed out.

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