Union Pacific Track Slows
Union Pacific (UNP) Union Pacific operates 31,974 miles of Class I railroads in the United States. They link 23 states in the western two-thirds of the country by rail.
[PostStockWidget stock_valuation="" pricetype="live" manual_date="Dec. 21, 2012, 2:04pm GMT" symbolcodes="'UNP'" symbolprices="96" div_align="right"]
We bought UNP in June at $95.89. Today, UNP released earnings that were better than expected, but management also suggested that there will be increasing headwinds for the next year.
In addition, this is the second consecutive decline in the trailing twelve months EPS. None of these are good signs, so at this juncture we believe it is best to seize a small profit and wait for better opportunities.
The Purple Chips 12 -18 month valuation range is: low $0, high $104.
EXITING UNION PACIFIC AT $96.95 (UNP-US) FULL POSITION
TOTAL RETURN (including dividends): +1.7%
PURPLE CHIPS TARGET: $104.00 POSITION SIZE: FULL (5.0) P/E: 16.7X DIV: 2.20 (2.3%) MKT CAP: $84.1B Debt: $10B RETURN ON CAPITAL: 18.0% EARNINGS YIELD: 9.3% 5 YR EPS Growth rate*:16.9% P/E/G Ratio: 0.98 EPS: $5.75 2017 EST.: $6.24 2018 EST.: $6.98
*Blended growth rate= 2/3 historical (5yrs), 1/3 forward.
