Blog > US Stocks and Markets > Genesee & Wyoming Railroad (GWR:NYSE) is getting closer to our sell target
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Genesee & Wyoming Railroad (GWR:NYSE) is getting closer to our sell target

Posted July 22, 2008

Hot Stock viewers had a chance to buy GWR between $34 and $31 by the time Independence Day rolled around — and are now looking at gains of 22-34%.

by J. Christoph Amberger

Baltimore — (TFN): “Use current lows to buy this railroad stock,” I ventured to viewers of Hot Stock Pick of the Week on June 26. And: “Buy Genesee & Wyoming Railroad (GWR:NYSE) below $35 a share with a target of $45 by year-end.” I argues that the Mississippi floods in the Midwest were creating a short-term opportunity in this well-diversified U.S. railroad stock.

Now phrasing my buy recommendation like this may strike you as overly non-committal and convenient, considering the stock was trading at “below $35″ the day we released our recommendation… and “way below $35″ a couple of days afterwards. (Typical: The moment I recommend a stock it starts going down…) But Hot Stock viewers had a chance to buy GWR between $34 and $31 by the time Independence Day rolled around.

Today, GWR closed at $41.76 — a gain of between 22-34%, depending on where you got in. Last week, the company eported an increase in June railroad traffic that was helped by higher traffic in the minerals and stone as well as the farm and food products segment. Same railroad traffic decreased from the prior year.

A day later, they announced the Q2 2008 Financial Release Conference Call, to take place August 4, 2008 at 11:00 a.m. EDT at http://www.gwrr.com (click on the “Investors” tab to listen or call Dial-In Numbers — in U.S., call (888) 428-4479; outside U.S., call (612) 332-0720.)

I don’t presume to know what they’re about to announce, but since that announcement, the stock price has increased by 12%, notwithstanding the lousy market last week.

We take what we get: I think between now and August 4, momentum may push this stock closer to my $45 target. We may be out of this stock before the kids get back to school. Meanwhile, adjust your stop-loss at around $39. In this volatile market, I’d prefer to take a smaller gain on a downturn rather than hanging on and waiting.

By the way, I picked this stock because it met all my “DGS” criteria. It truly is a “damn good stock”. If we’d had launched our premium service, Hot Stock Confidential, back in June, it would have made the cut for our paid subscribers. They, by the way, will receive their next Hot Stock Pick this coming Thursday.

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Posted by J. Christoph Amberger · Filed Under US Stocks and Markets 

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