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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 7/10

vs
industry
vs
history
Cash to Debt 0.10
CP's Cash to Debt is ranked higher than
52% of the 1004 Companies
in the Global Railroads industry.

( Industry Median: 0.33 vs. CP: 0.10 )
CP' s 10-Year Cash to Debt Range
Min: 0.01   Max: No Debt
Current: 0.1

Equity to Asset 0.42
CP's Equity to Asset is ranked higher than
66% of the 971 Companies
in the Global Railroads industry.

( Industry Median: 0.47 vs. CP: 0.42 )
CP' s 10-Year Equity to Asset Range
Min: 0.31   Max: 0.43
Current: 0.42

0.31
0.43
Interest Coverage 5.02
CP's Interest Coverage is ranked higher than
67% of the 640 Companies
in the Global Railroads industry.

( Industry Median: 5.52 vs. CP: 5.02 )
CP' s 10-Year Interest Coverage Range
Min: 1.92   Max: 9.76
Current: 5.02

1.92
9.76
F-Score: 8
Z-Score: 2.81
M-Score: -1.51
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 8/10

vs
industry
vs
history
Operating margin (%) 23.15
CP's Operating margin (%) is ranked higher than
90% of the 997 Companies
in the Global Railroads industry.

( Industry Median: 6.62 vs. CP: 23.15 )
CP' s 10-Year Operating margin (%) Range
Min: 7.48   Max: 45.38
Current: 23.15

7.48
45.38
Net-margin (%) 14.27
CP's Net-margin (%) is ranked higher than
88% of the 998 Companies
in the Global Railroads industry.

( Industry Median: 3.99 vs. CP: 14.27 )
CP' s 10-Year Net-margin (%) Range
Min: 1.91   Max: 20.1
Current: 14.27

1.91
20.1
ROE (%) 12.33
CP's ROE (%) is ranked higher than
87% of the 974 Companies
in the Global Railroads industry.

( Industry Median: 6.43 vs. CP: 12.33 )
CP' s 10-Year ROE (%) Range
Min: 2.13   Max: 17.34
Current: 12.33

2.13
17.34
ROA (%) 5.13
CP's ROA (%) is ranked higher than
85% of the 1000 Companies
in the Global Railroads industry.

( Industry Median: 3.11 vs. CP: 5.13 )
CP' s 10-Year ROA (%) Range
Min: 0.8   Max: 7.08
Current: 5.13

0.8
7.08
ROC (Joel Greenblatt) (%) 10.37
CP's ROC (Joel Greenblatt) (%) is ranked higher than
78% of the 997 Companies
in the Global Railroads industry.

( Industry Median: 7.59 vs. CP: 10.37 )
CP' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: 3.7   Max: 22.67
Current: 10.37

3.7
22.67
Revenue Growth (%) 5.70
CP's Revenue Growth (%) is ranked higher than
78% of the 839 Companies
in the Global Railroads industry.

( Industry Median: 4.40 vs. CP: 5.70 )
CP' s 10-Year Revenue Growth (%) Range
Min: 0   Max: 7.9
Current: 5.7

0
7.9
EBITDA Growth (%) 5.10
CP's EBITDA Growth (%) is ranked higher than
76% of the 731 Companies
in the Global Railroads industry.

( Industry Median: 2.50 vs. CP: 5.10 )
CP' s 10-Year EBITDA Growth (%) Range
Min: 0   Max: 29.2
Current: 5.1

0
29.2
EPS Growth (%) 8.80
CP's EPS Growth (%) is ranked higher than
75% of the 608 Companies
in the Global Railroads industry.

( Industry Median: 7.30 vs. CP: 8.80 )
CP' s 10-Year EPS Growth (%) Range
Min: -14.1   Max: 152.5
Current: 8.8

-14.1
152.5
» CP's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q1 2013

CP Guru Trades in Q1 2013

Ken Heebner 227,000 sh (New)
Ray Dalio 12,100 sh (New)
John Keeley 54,800 sh (+17.08%)
Bill Ackman 24,159,888 sh (unchged)
Steve Mandel 356,494 sh (unchged)
Whitney Tilson 50,000 sh (unchged)
Joel Greenblatt Sold Out
Whitney Tilson Sold Out
Jim Simons Sold Out
Jeremy Grantham 202,453 sh (-4.71%)
PRIMECAP Management 488,730 sh (-7.32%)
Steven Cohen 34,288 sh (-26%)
Larry Robbins 327,448 sh (-53.7%)
» More
Q2 2013

CP Guru Trades in Q2 2013

Jim Simons 89,900 sh (New)
Pioneer Investments 48,800 sh (New)
Steven Cohen 396,098 sh (+1055.21%)
Jeremy Grantham 257,553 sh (+27.22%)
Bill Ackman 24,159,888 sh (unchged)
Ken Heebner 227,000 sh (unchged)
Ray Dalio Sold Out
PRIMECAP Management 486,530 sh (-0.45%)
Larry Robbins 262,169 sh (-19.94%)
Steve Mandel 161,132 sh (-54.8%)
John Keeley 16,560 sh (-69.78%)
» More
Q3 2013

CP Guru Trades in Q3 2013

Jim Simons 263,900 sh (+193.55%)
Larry Robbins 748,239 sh (+185.4%)
Steve Mandel 161,132 sh (unchged)
John Keeley Sold Out
Pioneer Investments Sold Out
PRIMECAP Management 485,530 sh (-0.21%)
Bill Ackman 23,125,192 sh (-4.28%)
Jeremy Grantham 209,940 sh (-18.49%)
Ken Heebner 92,000 sh (-59.47%)
Steven Cohen 88,108 sh (-77.76%)
» More
Q4 2013

CP Guru Trades in Q4 2013

Louis Moore Bacon 70,000 sh (New)
Andreas Halvorsen 4,050,468 sh (New)
Pioneer Investments 30,257 sh (New)
Steve Mandel Sold Out
Ken Heebner Sold Out
PRIMECAP Management 485,130 sh (-0.08%)
Larry Robbins 597,939 sh (-20.09%)
Bill Ackman 17,159,888 sh (-25.8%)
Jeremy Grantham 125,136 sh (-40.39%)
Steven Cohen 29,139 sh (-66.93%)
Jim Simons 53,900 sh (-79.58%)
» More
» Details

Insider Trades

Latest Guru Trades with CP

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Steve Mandel 2013-12-31 Sold Out 0.09%$124.58 - $156.52 $ 148.183%0
John Keeley 2013-09-30 Sold Out 0.04%$117.44 - $129.3 $ 148.1820%0
Steve Mandel 2013-06-30 Reduce -54.8%0.13%$116.8 - $138.46 $ 148.1818%161132
John Keeley 2013-06-30 Reduce -69.78%0.1%$116.8 - $138.46 $ 148.1818%16560
Ray Dalio 2013-06-30 Sold Out 0.02%$116.8 - $138.46 $ 148.1818%0
Joel Greenblatt 2013-03-31 Sold Out 0.02%$101.62 - $130.47 $ 148.1826%0
Ray Dalio 2013-03-31 New Buy0.02%$101.62 - $130.47 $ 148.1826%12100
Steve Mandel 2012-12-31 New Buy0.23%$85.57 - $102.63 $ 148.1858%356494
Joel Greenblatt 2012-12-31 New Buy0.02%$85.57 - $102.63 $ 148.1858%4034
Ray Dalio 2012-12-31 Sold Out 0.01%$85.57 - $102.63 $ 148.1858%0
PRIMECAP Management 2012-09-30 Reduce -62.01%0.13%$72 - $87.7 $ 148.1884%637330
PRIMECAP Management 2012-06-30 Reduce -52.75%0.21%$69.59 - $78.09 $ 148.18100%1677730
Ray Dalio 2012-06-30 Reduce -75.59%0.04%$69.59 - $78.09 $ 148.18100%10300
John Keeley 2012-03-31 Add 234.01%0.07%$67.2 - $79.69 $ 148.18117%64330
Ray Dalio 2012-03-31 Add 290.74%0.04%$67.2 - $79.69 $ 148.18117%42200
Ray Dalio 2011-12-31 Reduce -37.57%$46.05 - $67.67 $ 148.18150%10800
John Keeley 2011-09-30 Add 156.89%0.01%$44.92 - $63.9 $ 148.18158%19755
Ray Dalio 2011-09-30 New Buy0.01%$44.92 - $63.9 $ 148.18158%17300
Premium More recent guru trades are included for Premium Members only!!
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Guru Investment Theses on Canadian Pacific Railway Ltd

Bill Ackman Comments on Canadian Pacific Railway Ltd. - Jun 13, 2012

From Pershing Square's first-quarter letter:

Portfolio Update

Canadian Pacific Railway Ltd. (CP)

On May 17th, all seven of the Nominees for Management Change including Paul Hilal and myself were elected to the board of CP each with support from 85% to 94% of the shareholders. The six CP directors who received the fewest votes, including CP’s Chairman and CEO Fred Green, resigned from the board the night before the annual meeting.

As a result of the election, we have received an overwhelming mandate for management change at CP. The new board is working diligently to identify a new CEO for the company, while Steve Tobias, a Pershing Square nominee and former Executive Vice Chairman of Norfolk Southern, serves as interim CEO. In light of the limited number of potential railroad CEO candidates, we do not expect a lengthy search process. During the contest, we proposed legendary railroader Hunter Harrison as CEO, but committed that the new board would also consider other candidates for the role.

On June 4th, the board elected Paul Haggis as its new chairman. We recruited Paul to our board slate because he brings valuable turnaround and board expertise as well as strong relationships in the Canadian business and government communities.

Because CP’s business issues are almost entirely operational in nature – the railroad’s operating margins are half that of its Canadian competitor due to its inefficient asset utilization and productivity – this turnaround is substantially less risky than one predicated on increasing revenue growth. CP’s business will, however, be somewhat impacted by global macro conditions. In assessing the profit potential of this investment, we have used conservative assumptions about the global economic environment. Even in a weak economic environment, we expect the potential for operating profit enhancements to greatly exceed the impact of macro headwinds on the value of the business.

The significance of our landslide victory at CP has not gone unnoticed in board rooms in Canada and in the United States. In CP, an activist shareholder from the U.S. received overwhelming shareholder support from Canadian and U.S. shareholders in a contest against a high profile board of a large cap iconic Canadian company. Our success at CP demonstrates that no underperforming company can resist needed change when it is proposed by a credible long-term investor

Check out Bill Ackman latest stock trades

Top Ranked Articles about Canadian Pacific Railway Ltd

Activist Investor Bill Ackman, Sells in Review
The recently updated portfolio of William “Bill” Ackman, CEO of Pershing Square Capital Management, lists eight stocks, none of them new, and a total value of $10.927 billion. The fund’s quarter-over-quarter turnover is 11%. The portfolio’s top sectors are weighted as: consumer defensive at 33.1%, industrials at 27.7% and basic materials at 21.3%. According to the GuruFocus Scoreboard, Guru Bill Ackman is averaging a 12-month return of 7.38%. Read more...
Real-Time Report: Ackman Reduces Railroad, CP Hits All-Time High
As the historic Canadian Pacific Railway Ltd. (CP) delivers a stellar third quarter and is anticipating a record-breaking 2013, Guru Bill Ackman reduced his large CP position by almost one-third, according to GuruFocus Real Time Picks. Read more...
Bill Ackman’s Mixed Track Record
As noted yesterday, activist investor Bill Ackman had a stunning success with his Canadian Pacific Railway campaign. But the Pershing Square manager’s all-in style has also stalled and crashed in the past. The following surveys the recent investing ups and downs of a guru who still managed to return 25% on average annualized from 2004 to 2010. Read more...
Bill Ackman to Trim Largest Holding Canadian Pacific Railway - History and Analysis
Activist investor Bill Ackman announced Monday he will trim his stake in the railway company he besieged in fall of 2011, Canadian Pacific Railway (CP). With lesser results in other recent investments at such as J.C. Penney (JCP) and Herbalife (HLF), the Pershing Square founder roughly doubled his money on this one. Read more...

Ratios

vs
industry
vs
history
P/E(ttm) 32.60
CP's P/E(ttm) is ranked lower than
55% of the 805 Companies
in the Global Railroads industry.

( Industry Median: 16.70 vs. CP: 32.60 )
CP' s 10-Year P/E(ttm) Range
Min: 7.47   Max: 44.15
Current: 32.6

7.47
44.15
P/B 3.90
CP's P/B is ranked lower than
67% of the 946 Companies
in the Global Railroads industry.

( Industry Median: 1.20 vs. CP: 3.90 )
CP' s 10-Year P/B Range
Min: 0.78   Max: 4.7
Current: 3.9

0.78
4.7
P/S 4.70
CP's P/S is ranked lower than
77% of the 992 Companies
in the Global Railroads industry.

( Industry Median: 0.96 vs. CP: 4.70 )
CP' s 10-Year P/S Range
Min: 1.06   Max: 5
Current: 4.7

1.06
5
PFCF 40.20
CP's PFCF is ranked lower than
59% of the 493 Companies
in the Global Railroads industry.

( Industry Median: 15.71 vs. CP: 40.20 )
CP' s 10-Year PFCF Range
Min: 19.91   Max: 3842
Current: 40.2

19.91
3842
EV-to-EBIT 22.70
CP's EV-to-EBIT is ranked lower than
51% of the 893 Companies
in the Global Railroads industry.

( Industry Median: 16.40 vs. CP: 22.70 )
CP' s 10-Year EV-to-EBIT Range
Min: 4   Max: 28.4
Current: 22.7

4
28.4
PEG 7.30
CP's PEG is ranked lower than
63% of the 461 Companies
in the Global Railroads industry.

( Industry Median: 1.40 vs. CP: 7.30 )
CP' s 10-Year PEG Range
Min: 0.7   Max: 46.68
Current: 7.3

0.7
46.68
Shiller P/E 42.30
CP's Shiller P/E is ranked lower than
60% of the 517 Companies
in the Global Railroads industry.

( Industry Median: 18.98 vs. CP: 42.30 )
CP' s 10-Year Shiller P/E Range
Min: 8.13   Max: 44.56
Current: 42.3

8.13
44.56

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield 0.90
CP's Dividend Yield is ranked lower than
79% of the 743 Companies
in the Global Railroads industry.

( Industry Median: 2.00 vs. CP: 0.90 )
CP' s 10-Year Dividend Yield Range
Min: 0.81   Max: 3.01
Current: 0.9

0.81
3.01
Dividend Payout 0.28
CP's Dividend Payout is ranked higher than
70% of the 615 Companies
in the Global Railroads industry.

( Industry Median: 0.33 vs. CP: 0.28 )
CP' s 10-Year Dividend Payout Range
Min: 0.06   Max: 0.48
Current: 0.28

0.06
0.48
Dividend growth (3y) 9.80
CP's Dividend growth (3y) is ranked higher than
86% of the 459 Companies
in the Global Railroads industry.

( Industry Median: 0.40 vs. CP: 9.80 )
CP' s 10-Year Dividend growth (3y) Range
Min: 0   Max: 59.6
Current: 9.8

0
59.6
Yield on cost (5-Year) 1.44
CP's Yield on cost (5-Year) is ranked lower than
62% of the 762 Companies
in the Global Railroads industry.

( Industry Median: 1.95 vs. CP: 1.44 )
CP' s 10-Year Yield on cost (5-Year) Range
Min: 1.29   Max: 4.8
Current: 1.44

1.29
4.8
Share Buyback Rate -1.40
CP's Share Buyback Rate is ranked higher than
73% of the 616 Companies
in the Global Railroads industry.

( Industry Median: -1.00 vs. CP: -1.40 )
CP' s 10-Year Share Buyback Rate Range
Min: 0   Max: -3.1
Current: -1.4

Valuation & Return

vs
industry
vs
history
Price/Tangible Book 4.10
CP's Price/Tangible Book is ranked lower than
70% of the 890 Companies
in the Global Railroads industry.

( Industry Median: 1.20 vs. CP: 4.10 )
CP' s 10-Year Price/Tangible Book Range
Min: 1.14   Max: 4.06
Current: 4.1

1.14
4.06
Price/DCF (Projected) 5.10
CP's Price/DCF (Projected) is ranked lower than
70% of the 458 Companies
in the Global Railroads industry.

( Industry Median: 1.30 vs. CP: 5.10 )
CP' s 10-Year Price/DCF (Projected) Range
Min: 1.05   Max: 4.99
Current: 5.1

1.05
4.99
Price/Median PS Value 2.10
CP's Price/Median PS Value is ranked lower than
72% of the 949 Companies
in the Global Railroads industry.

( Industry Median: 1.10 vs. CP: 2.10 )
CP' s 10-Year Price/Median PS Value Range
Min: 0.62   Max: 2.21
Current: 2.1

0.62
2.21
Price/Peter Lynch Fair Value 5.10
CP's Price/Peter Lynch Fair Value is ranked lower than
81% of the 252 Companies
in the Global Railroads industry.

( Industry Median: 1.10 vs. CP: 5.10 )
CP' s 10-Year Price/Peter Lynch Fair Value Range
Min: 1.22   Max: 1.98
Current: 5.1

1.22
1.98
Price/Graham Number 2.40
CP's Price/Graham Number is ranked lower than
68% of the 734 Companies
in the Global Railroads industry.

( Industry Median: 1.00 vs. CP: 2.40 )
CP' s 10-Year Price/Graham Number Range
Min: 0.72   Max: 2.41
Current: 2.4

0.72
2.41
Earnings Yield (Greenblatt) 4.40
CP's Earnings Yield (Greenblatt) is ranked higher than
56% of the 917 Companies
in the Global Railroads industry.

( Industry Median: 6.00 vs. CP: 4.40 )
CP' s 10-Year Earnings Yield (Greenblatt) Range
Min: 3.5   Max: 25
Current: 4.4

3.5
25
Forward Rate of Return (Yacktman) 2.96
CP's Forward Rate of Return (Yacktman) is ranked higher than
73% of the 705 Companies
in the Global Railroads industry.

( Industry Median: 3.93 vs. CP: 2.96 )
CP' s 10-Year Forward Rate of Return (Yacktman) Range
Min: 0.1   Max: 25.6
Current: 2.96

0.1
25.6

Business Description

Industry: Transportation & Logistics » Railroads
Compare:TRN, UNP, EJPRY, CSX, MTRJY » details
Traded in other countries:CP.Canada, PC8.Germany
Canadian Pacific Railway Ltd was incorporated by Letters Patent in 1881 pursuant to an Act of the Parliament of Canada. The Company provides freight transportation services, logistics solutions, and supply chain expertise in Canada and the United States. Its rail network is spread across an area of 14,400 miles, serving the principal business centers of Canada from Montreal, Quebec, to Vancouver, British Columbia, and the U.S. Northeast and Midwest regions. The Company transports bulk commodities, including grain, coal, sulphur, and fertilizers; and merchandise freight, such as finished vehicles and automotive parts. It also transports forest products, such as wood pulp, paper, paperboard, newsprint, lumber, panel, and oriented strand board; and industrial and consumer products comprising chemicals, energy, and plastics, as well as mine, metals, and aggregates. It primarily derives revenues from freight transportation. In addition, it makes revenues from leasing of certain assets, switching fees, contracts with passenger service operators, as well as provision of logistical services. The Company's operations are primarily regulated by the Canadian Transportation Agency and Transport Canada in Canada and the FRA and the STB in the U.S.

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