Profit Pregame

The New Frontier of Railroad

Thanks to an agreement reached between Canadian Pacific Railway and Kansas City Southern – we could see an exciting development coming to the railroad sector.

What’s happening?

Over the weekend, we saw Canadian Pacific Railway (CP) agree to buy Kansas City Southern (KSU) for a whopping $25 billion in cash-and-shares deal. And while the price tag is eye catching – what the company plans to do is even more exciting.

This deal will allow the company to create the first rail network connecting the United States, Mexico, and Canada, betting on a pick-up in North American trade. This railway will offer an innovative way to ship products fast and more efficiently. It will also help cut emissions, shift trucks off crowded U.S. highways, and more.

With the positive nature that comes with this development, many are rushing to get their piece of this monumental acquisition.

But before you add this stock to your lineup, here’s what I think you need to know…

Where’s the money?

This deal marks the largest M&A transaction in 2021.

And with it all officially moving forward, shareholders are reaping the benefits. Shareholders of Kansas City Southern will receive 0.489 of a Canadian Pacific share and $90 in cash for each KCS common share held.

This good press is causing many to rush to get their piece of what could be the future of railroad but in my opinion, this rush is premature. Because while the news is exciting – getting ahead of these kinds of deals is key.

That’s why I won’t be looking to add CP to my lineup – but here’s what has caught my eye instead.

How do I get some?

When it comes down to the details, this deal moved forward because CP had too much cash on their book and they had to figure out how to spend it. And while this decision is a great step forward, it doesn’t mean I’m rushing to get my piece of it.

Instead, I’m focusing on what this deal could mean for other stocks.

You see, I think this is a massive step forward for the world of acquisitions and I’m guessing that the success of this one will lead to even more deals in the future. And that’s why instead of chasing this high flyer, I’m keeping an eye on stocks that could be acquired in the year to come.

And I’ve got three names that I think could deliver some big wins.

Macy’s (M).

FireEye (FEYE).

And Kroger Co. (KR).

So, if you’re looking to throw your hat in the acquisition ring – these are the three stocks I believe you can get ahead of the rush with and ride their possible upcoming deals straight to the bank.

In the Spotlight: The issue with the bright economic outlook

We’re slowly seeing the economy shake off the “Covid blues” and come back to life. In fact, the US Economy is on track for a massive boom, with the Federal Reserve predicting that it would expand by 6.5% in the year 2021.

That would mark the fastest growth we’ve seen since 1984.

But some of the top economist are worried that the future isn’t as bright as one might expect with the recent strong prediction.

In fact, in a recent survey done by the National Association for Business Economics revealed that a majority of the 205 members surveyed “believe risks to inflation are greater than those seen in the past two decades.”

And these concerns seem to be valid given that inflation, not coronavirus, is most-cited risk by portfolio managers. Now, these inflation concerns are not new- especially given the constant anxiety on Wall Street that a rush to eat out or travel could trigger a spike in prices. And many wonder if the spike could force the Fed to raise interest rates or slow bond purchases sooner than expected to help cool off the economy.

The truth is – no one can predict for sure what’s to come. But the good news is – you don’t need to predict the future to score big in the market. In fact, getting caught up in the what might happen can actually hurt your bottom dollar. So, while I plan to keep you updated about how this economy continues to unfold – just continue to trust your trading plan and process.

Regardless of What Happens…

One sector that’s been on everyone’s minds recently – for good reason – is cryptocurrencies.

The uncertainty caused by the threat of inflation, combined with the continued investments by major companies, all signify to my colleague Tom Gentile that crypto will be your best bet for profits throughout 2021 and beyond.

During Tom’s three-plus decades of trading, he’s never seen one market so consistently crush his expectations!

But despite crypto’s growing usage, there are still ways you can play it under the radar for a shot at even bigger returns.

Click here now for the full story.

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