Value Hunters: Look To Kansas City Southern (NYSE: KSU)


    BlackRock Fund Advisors recently announced the acquisition of new stake in Kansas City Southern (NYSE:KSU). The institutional investor has increased its shareholding in the Industrials company by 2.63% to 5.24 million shares with purchase of 0.13 million shares. This fresh investment now brings its stake to 5.52% valued currently at $782.76 million. In addition, SSgA Funds Management, Inc. raised its holdings by 2031.0 to 4.53 million shares. And Geode Capital Management LLC has lifted its position by 3.70% or 64039.0 shares – to 1.8 million shares.

    With over 1.15 million Kansas City Southern (KSU) shares trading Tuesday and a closing price of $152.85 on the day, the dollar volume was approximately $176.32 million. The shares have shown a positive weekly performance of 5.31% and its price on 07/14/20 gained nearly 3.33%. Currently, there are 95.66M common shares owned by the public and among those 94.59M shares have been available to trade.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 22 analysts who have offered their price forecasts for KSU have a consensus price objective of $155.53. The analysts have set the share’s price value over the next 12 months at a high of $175.00 and a low of $125.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Kansas City Southern stock is 2.40 for the next 12 months. The average price target is 2.47% above its last price level and an upside to the estimated low will see the stock lose -22.28% over that period. But an upside of 12.66% will see the stock hit the forecast high price target while mean target price for the stock is $160.00.

    Insiders at the company have transacted a total of 100 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 47 of these insider trades were purchases, accounting for 134,951 shares. Insider sales of the common stock occurred on 53 occasions, with total insider shares sold totaling 122,218 shares.

    The top 3 mutual fund holders in Kansas City Southern are Vanguard Total Stock Market Index, Vanguard Mid Cap Index Fund, and Vanguard 500 Index Fund. Vanguard Total Stock Market Index owns 2.86 million shares of the company’s stock, all valued at over $427.26 million. The company sold 13920.0 shares recently to bring their total holdings to about 3.01% of the shares outstanding. Vanguard Mid Cap Index Fund bought 14613.0 shares to see its total holdings expand to 2.59 million shares valued at over $386.18 million and representing 2.72% of the shares outstanding. Vanguard 500 Index Fund sold 2860.0 shares to bring its total holdings to over 2.02 million shares at a value of $302.22 million. Vanguard 500 Index Fund now owns shares totaling to 2.13% of the shares outstanding.

    Shares of Kansas City Southern (NYSE: KSU) opened at $147.11, down -$0.82 from a prior closing price of $147.93. However, the script later closed the day at $152.85, up 3.33%. The company’s stock has a 5-day price change of 5.31% and 9.70% over the past three months. KSU shares are trading -0.20% year to date (YTD), with the 12-month market performance up to 25.70% higher. It has a 12-month low price of $92.86 and touched a high of $178.59 over the same period. Currently, 1.15 million shares have been traded, compared to an average intraday trading volume of 1.17 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 4.48%, 5.54%, and 4.42% respectively.

    Institutional ownership of Kansas City Southern (NYSE: KSU) shares accounts for 96.40% of the company’s 95.66M shares outstanding. Mutual fund holders own 43.86%, while other institutional holders and individual stakeholders account for 51.46% and 21.20% respectively.

    It has a market capitalization of $14.43B and a beta (3y monthly) value of 0.92. The stock’s trailing 12-month PE ratio is 25.63, while the earnings-per-share (ttm) stands at $5.96. The company has a PEG of 2.50 and a Quick Ratio of 1.00 with the debt-to-equity ratio at 0.73. Price movements for the stock have been influenced by the stock’s volatility, which stands at 2.91% over the week and 3.23% over the month.

    Analysts forecast that Kansas City Southern (KSU) will achieve an EPS of $1.15 for the current quarter, $1.67 for the next quarter and $8.02 for 2021. The lowest estimate earnings-per-share for the quarter is $1.06 while analysts give the company a high EPS estimate of $1.33. Comparatively, EPS for the current quarter was $1.64 a year ago. Earnings per share for the fiscal year are expected to decrease by -8.90%, and 21.75% over the next financial year. EPS should grow at an annualized rate of 10.26% over the next five years, compared to 3.50% over the past 5-year period.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 22 brokerage firm advisors rate Kansas City Southern (KSU) as a “Moderate Buy” at a consensus score of 2.40. Specifically, 9 Wall Street analysts polled rate the stock as a buy, while 11 of the 22 advise that investors “hold,” and 1 rated it as a “Sell.”

    Looking at the support for the KSU, a number of firms have released research notes about the stock. JP Morgan stated their Underweight rating for the stock in a research note on April 09, 2020, with the firm’s price target at $130. Stifel coverage for the Kansas City Southern (KSU) stock in a research note released on April 07, 2020 offered a Buy rating with a price target of $146. UBS was of a view on April 01, 2020 that the stock is Neutral, while Evercore ISI gave the stock Outperform rating on March 26, 2020, issuing a price target of $163. BMO Capital Markets on their part issued Market Perform rating on February 06, 2020.


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