Hide

FocusBar

FeedbackFeedback
Subscribe to Premium Member
132.87 (1y: +76%)
Market Cap 23.51 B P/E(ttm) 42.80
Enterprise Value 28.13 B P/B 4.70
CP- NYSE (USA)
Canadian Pacific Railway Ltd
  • Currently 1/5
Business Predictability Rank: 1-Star (On Watch)
Back Testing Results:
Average gain of all 1-Star stocks: 1.1% per year.
% of Stocks that are in still loss if held for 10yrs: 45%.
Read more:
What is Predictability Rank?
Performances of real portfolio
Top Ranked Predictable Companies
$132.87
Switch to:

GuruFocus Financial Strength Rank measures how strong a companyÂ’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 : 5/10

vs
industry		 vs
history
Cash to Debt 0.071
CP's Cash to Debt is ranked lower than
75% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 0.49 vs. CP: 0.071 )
CP' s 10-Year Cash to Debt Range
Min: 0.01   Max: 0.15
Current: 0.07
0.01
0.15
Equity to Asset 0.335
CP's Equity to Asset is ranked lower than
55% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 0.38 vs. CP: 0.335 )
CP' s 10-Year Equity to Asset Range
Min: 0.32   Max: 0.43
Current: 0.34
0.32
0.43
Interest Coverage 3.4
CP's Interest Coverage is ranked lower than
59% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 12.85 vs. CP: 3.4 )
CP' s 10-Year Interest Coverage Range
Min: 2   Max: 12
Current: 3.4
2
12
F-Score: 7
Z-Score: 2.6
M-Score: -2.67
GuruFocus Profitability Rank ranks how profitable a company is and how likely the companyÂ’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 : 7/10

vs
industry		 vs
history
Operating margin (%) 16.70
CP's Operating margin (%) is ranked higher than
88% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 5.70 vs. CP: 16.70 )
CP' s 10-Year Operating margin (%) Range
Min: 7.5   Max: 49.2
Current: 16.7
7.5
49.2
Net-margin (%) 8.5
CP's Net-margin (%) is ranked higher than
86% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 3.20 vs. CP: 8.5 )
CP' s 10-Year Net-margin (%) Range
Min: 1.9   Max: 20.1
Current: 8.5
1.9
20.1
ROE (%) 9.5
CP's ROE (%) is ranked higher than
88% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 6.00 vs. CP: 9.5 )
CP' s 10-Year ROE (%) Range
Min: 2.1   Max: 17.3
Current: 9.5
2.1
17.3
ROA (%) 3.3
CP's ROA (%) is ranked higher than
77% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 2.40 vs. CP: 3.3 )
CP' s 10-Year ROA (%) Range
Min: 0.8   Max: 7.1
Current: 3.3
0.8
7.1
ROC (Joel Greenblatt) (%) 7.40
CP's ROC (Joel Greenblatt) (%) is ranked higher than
64% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 8.00 vs. CP: 7.40 )
CP' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: 3.8   Max: 25.2
Current: 7.4
3.8
25.2
Revenue Growth (%) 6.2
CP's Revenue Growth (%) is ranked higher than
79% of the 433 Companies
in the Global Railroads industry.

( Industry Median: -1.80 vs. CP: 6.2 )
CP' s 10-Year Revenue Growth (%) Range
Min: -2.8   Max: 23
Current: 6.2
-2.8
23
EBITDA Growth (%) 0.8
CP's EBITDA Growth (%) is ranked higher than
80% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 0.50 vs. CP: 0.8 )
CP' s 10-Year EBITDA Growth (%) Range
Min: -16.5   Max: 46.7
Current: 0.8
-16.5
46.7
EPS Growth (%) -6.6
CP's EPS Growth (%) is ranked higher than
74% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 2.10 vs. CP: -6.6 )
CP' s 10-Year EPS Growth (%) Range
Min: -10.8   Max: 100.7
Current: -6.6
-10.8
100.7
» CP's 10-Y Financials

Financials


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

» Details

Guru Trades
Q2 2012

CP Guru Trades in Q2 2012

Jim Simons 311,800 sh (New)
Chuck Royce 4,650 sh (New)
Steven Cohen 26,413 sh (+84.55%)
Jeremy Grantham 233,753 sh (+38.03%)
John Keeley 65,647 sh (+2.05%)
Bill Ackman 24,159,888 sh (unchged)
Ken Fisher Sold Out
Pioneer Investments Sold Out
PRIMECAP Management 1,677,730 sh (-52.75%)
Ray Dalio 10,300 sh (-75.59%)
» More
Q3 2012

CP Guru Trades in Q3 2012

Steven Cohen 65,365 sh (+147.47%)
Jim Simons 443,400 sh (+42.21%)
Bill Ackman 24,159,888 sh (unchged)
Signature Select Canadian Fund Sold Out
Ray Dalio 10,200 sh (-0.97%)
Jeremy Grantham 225,653 sh (-3.47%)
John Keeley 53,332 sh (-18.76%)
Chuck Royce 3,550 sh (-23.66%)
PRIMECAP Management 637,330 sh (-62.01%)
» More
Q4 2012

CP Guru Trades in Q4 2012

Larry Robbins 707,248 sh (New)
Steve Mandel 356,494 sh (New)
Joel Greenblatt 4,034 sh (New)
Whitney Tilson 10,000 sh (New)
Jeremy Grantham 212,453 sh (unchged)
Bill Ackman 24,159,888 sh (unchged)
Chuck Royce Sold Out
Ray Dalio Sold Out
John Keeley 46,805 sh (-12.24%)
PRIMECAP Management 527,330 sh (-17.26%)
Steven Cohen 46,335 sh (-29.11%)
Jim Simons 148,300 sh (-66.55%)
» More
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
Jim Simons Sold Out
Whitney Tilson 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
» Details

Insider Trades

Latest Guru Trades with CP

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Joel Greenblatt 2013-03-31 Sold Out 0.02%$101.62 - $130.47 $ 134.7114%0
Ray Dalio 2013-03-31 New Buy0.02%$101.62 - $130.47 $ 134.7114%12100
Steve Mandel 2012-12-31 New Buy0.23%$85.57 - $102.63 $ 134.7144%356494
Joel Greenblatt 2012-12-31 New Buy0.02%$85.57 - $102.63 $ 134.7144%4034
Ray Dalio 2012-12-31 Sold Out 0.01%$85.57 - $102.63 $ 134.7144%0
PRIMECAP Management 2012-09-30 Reduce -62.01%0.13%$72 - $87.7 $ 134.7167%637330
PRIMECAP Management 2012-06-30 Reduce -52.75%0.21%$69.59 - $78.09 $ 134.7182%1677730
Ray Dalio 2012-06-30 Reduce -75.59%0.04%$69.59 - $78.09 $ 134.7182%10300
John Keeley 2012-03-31 Add 234.01%0.07%$67.2 - $79.69 $ 134.7198%64330
Ray Dalio 2012-03-31 Add 290.74%0.04%$67.2 - $79.69 $ 134.7198%42200
Ray Dalio 2011-12-31 Reduce -37.57%$46.05 - $67.67 $ 134.71127%10800
John Keeley 2011-09-30 Add 156.89%0.01%$44.92 - $63.9 $ 134.71135%19755
Ray Dalio 2011-09-30 New Buy0.01%$44.92 - $63.9 $ 134.71135%17300
George Soros 2010-09-30 Sold Out 0.01%$53.14 - $62.48 $ 134.71128%0
PRIMECAP Management 2010-03-31 Add 23.19%0.04%$46.24 - $55.88 $ 134.71160%2348530
John Keeley 2010-03-31 Reduce -77.26%0.01%$46.24 - $55.88 $ 134.71160%10350
George Soros 2010-03-31 New Buy$46.24 - $55.88 $ 134.71160%5300
Premium More recent guru trades are included for Premium Members only!!

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

Bill Ackman’s Activist Positions in J.C. Penney and Canadian Pacific Railway
June 14, 2012
Bill Ackman - Bill Ackman’s Activist Positions In J.C. Penney And Canadian Pacific Railway
Bill Ackman’s goals for J.C. Penney and Canadian Pacific Railway are big, and not enough progress has been made yet to clearly see whether his plans will work and his fighting for change offers a worthwhile competitive advantage. This week, the founder of Pershing Square Capital Management and activist investor issued a letter outlining the state of his current deals, including J.C. Penney (JCP) and Canadian Pacific Railway (CP), which are now almost 40 percent of his highly concentrated portfolio. Read more...
Bill Ackman Comments on Canadian Pacific Railway Ltd.
June 13, 2012
From Pershing Square's first-quarter letter: Read more...

Ratios

vs
industry		 vs
history
P/E(ttm) 43.30
CP's P/E(ttm) is ranked higher than
57% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 18.14 vs. CP: 43.30 )
CP' s 10-Year P/E(ttm) Range
Min: 7.47   Max: 44.15
Current: 43.3
7.47
44.15
P/B 4.78
CP's P/B is ranked lower than
87% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 1.13 vs. CP: 4.78 )
CP' s 10-Year P/B Range
Min: 0.82   Max: 4.59
Current: 4.78
0.82
4.59
P/S 4.19
CP's P/S is ranked lower than
86% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 0.61 vs. CP: 4.19 )
CP' s 10-Year P/S Range
Min: 1.07   Max: 4.27
Current: 4.19
1.07
4.27
PFCF 88.46
CP's PFCF is ranked lower than
82% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 15.02 vs. CP: 88.46 )
CP' s 10-Year PFCF Range
Min: 19.34   Max: 2.81115E+17
Current: 88.46
19.34
2.81115E+17
EV-to-EBIT 27.83
CP's EV-to-EBIT is ranked higher than
63% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 14.30 vs. CP: 27.83 )
CP' s 10-Year EV-to-EBIT Range
Min: 4.9   Max: 28.4
Current: 27.83
4.9
28.4
Shiller P/E 32.49
CP's Shiller P/E is ranked higher than
74% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 13.80 vs. CP: 32.49 )
CP' s 10-Year Shiller P/E Range
Min: 8.09   Max: 33.12
Current: 32.49
8.09
33.12

Dividend & Buy Back

vs
industry		 vs
history
Dividend Yield 1.04
CP's Dividend Yield is ranked higher than
51% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 2.02 vs. CP: 1.04 )
CP' s 10-Year Dividend Yield Range
Min: 0.95   Max: 3.01
Current: 1.04
0.95
3.01
Dividend Payout 0.7
CP's Dividend Payout is ranked higher than
89% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 0.61 vs. CP: 0.7 )
CP' s 10-Year Dividend Payout Range
Min: 0.05   Max: 0.48
Current: 0.7
0.05
0.48
Dividend growth (3y) 8.1
CP's Dividend growth (3y) is ranked higher than
97% of the 433 Companies
in the Global Railroads industry.

( Industry Median: -16.90 vs. CP: 8.1 )
CP' s 10-Year Dividend growth (3y) Range
Min: 0   Max: 42
Current: 8.1
0
42
Yield on cost (5-Year) 1.48
CP's Yield on cost (5-Year) is ranked higher than
66% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 1.95 vs. CP: 1.48 )
CP' s 10-Year Yield on cost (5-Year) Range
Min: 1.41   Max: 4.46
Current: 1.48
1.41
4.46
Share Buyback Rate -0.9
CP's Share Buyback Rate is ranked higher than
70% of the 433 Companies
in the Global Railroads industry.

( Industry Median: -0.60 vs. CP: -0.9 )
CP' s 10-Year Share Buyback Rate Range
Min: 17.8   Max: -2.3
Current: -0.9

Valuation & Return

vs
industry		 vs
history
Price/Net Current Asset Value 57.5
CP's Price/Net Current Asset Value is ranked higher than
94% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 8.00 vs. CP: 57.5 )
CP' s 10-Year Price/Net Current Asset Value Range
Min: 11   Max: 41.2
Current: 57.5
11
41.2
Price/Tangible Book 4.9
CP's Price/Tangible Book is ranked higher than
90% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 1.45 vs. CP: 4.9 )
CP' s 10-Year Price/Tangible Book Range
Min: 1.1   Max: 3.5
Current: 4.9
1.1
3.5
Price/DCF (Projected) 6.6
CP's Price/DCF (Projected) is ranked higher than
98% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 1.00 vs. CP: 6.6 )
CP' s 10-Year Price/DCF (Projected) Range
Min: 1.1   Max: 4.7
Current: 6.6
1.1
4.7
Price/Median PS Value 2.2
CP's Price/Median PS Value is ranked higher than
94% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 0.80 vs. CP: 2.2 )
CP' s 10-Year Price/Median PS Value Range
Min: 0.7   Max: 1.6
Current: 2.2
0.7
1.6
Price/Graham Number 3.3
CP's Price/Graham Number is ranked higher than
89% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 1.00 vs. CP: 3.3 )
CP' s 10-Year Price/Graham Number Range
Min: 0.7   Max: 2.4
Current: 3.3
0.7
2.4
Earnings Yield (Greenblatt) 3.60
CP's Earnings Yield (Greenblatt) is ranked higher than
82% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 7.10 vs. CP: 3.60 )
CP' s 10-Year Earnings Yield (Greenblatt) Range
Min: 3.5   Max: 20.3
Current: 3.6
3.5
20.3
Forward Rate of Return (Yacktman) -1.53
CP's Forward Rate of Return (Yacktman) is ranked higher than
76% of the 433 Companies
in the Global Railroads industry.

( Industry Median: 3.78 vs. CP: -1.53 )
CP' s 10-Year Forward Rate of Return (Yacktman) Range
Min: -2.6   Max: 3.1
Current: -1.53
-2.6
3.1

Business Description

Canadian Pacific Railway Ltd was incorporated on June 22, 2001 under the Canada Business Corporations Act. On July 20, 2001, the Company amended its Articles of Incorporation to change its name to Canadian Pacific Railway Limited. It is a holding company whose direct and indirect subsidiaries operate railways in North America. The main operating subsidiary of the Company is Canadian Pacific Railway Company (CPRC). CPRC is one of Canada's oldest corporations. CPRC has developed into a fully integrated and technologically advanced Class I railway providing rail and intermodal freight transportation services over a 14,700 mile network serving the main business centres of Canada, from Montreal to Vancouver, British Columbia, and the U.S. Midwest and Northeast regions. The Company's railway feeds directly into the US heartland from the East and West coasts. It transports bulk commodities, merchandise freight and intermodal traffic. Bulk commodities include grain, coal, sulphur and fertilizers. Merchandise freight consists of finished vehicles and automotive parts, as well as forest and industrial and consumer products. Intermodal traffic consists largely of high-value, time-sensitive retail goods in overseas containers that can be transported by train, ship and truck, and in domestic containers and trailers that can be moved by train and truck. The Company owns approximately 10,600 miles of track. An additional 4,100 miles of track are owned jointly, leased or operated under trackage rights. Of the total mileage operated, approximately 6,000 miles are located in western Canada, 2,200 miles in eastern Canada, 5,400 miles in the U.S. Midwest and 1,100 miles in the U.S. Northeast. The Company's business is based on funnelling railway traffic from feeder lines and connectors, including secondary and branch lines, onto its high-density mainline railway network. The Company's has extended its network reach by establishing alliances and connections with other major Class I railways in North America, which allows the Company to provide competitive services and access to markets across North America beyond its own rail network. The Company also provides service to markets in Europe and the Pacific Rim through direct access to the Port of Montreal and the Port Metro Vancouver in Vancouver, B.C., respectively. The Company's network accesses the U.S. market directly through three wholly owned subsidiaries: Soo Line Railroad Company, a Class I railway operating in the U.S. Midwest; DM&E, a wholly owned subsidiary of the Soo Line, which operates in the U.S. Midwest; and the Delaware and Hudson Railway Company, Inc., which operates between eastern Canada and major U.S. Northeast markets, including New York City, New York; Philadelphia, Pennsylvania; and Washington, D.C. The Company's railway operations are subject to extensive federal laws, regulations and rules in both Canada and the U.S. The Company's operations are primarily regulated by the Cana
Company Website
Industry: Railroads
Compare:TRN, UNP, EJPRY, CSX, MTRJY
Traded in other countries:CP.Canada, PC8.Germany

Personalized Checklist





Within your circle of competence?
Macro economic environment favorable?
High quality business?
Enough margin of safety with stocks?
Gurus are buying?
Insiders are buying?
Management capable and shareholder friendly?
Catalyst for stock price to appreciate?
Your level of confidence with the research?

GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names
Free 7-day Trial