Kansas City Southern (KSU) Lowered to Hold at Zacks Investment Research

Zacks Investment Research lowered shares of Kansas City Southern (NYSE:KSU) from a buy rating to a hold rating in a research report released on Wednesday, October 4th.

According to Zacks, “Kansas City Southern's shares comfortably outperformed the industry it belongs to in the last six months. The improving scenario with respect to coal is aiding Kansas City Southern significantly. We are also bullish on the company's efforts to reward shareholders dividend payments and buybacks. In line with this objective, the company recently hiked its quarterly dividend in excess of 9%. Moreover, its board cleared a new share repurchase program worth $800 million. Sluggish intermodal revenues and high fuel costs, however, remain concerns. Moreover, high fuel costs might limit bottom line growth going forward.”

Several other equities analysts also recently commented on KSU. Credit Suisse Group raised Kansas City Southern from a neutral rating to an outperform rating and upped their target price for the company from $90.00 to $116.00 in a research report on Friday, June 16th. Aegis upped their target price on Kansas City Southern from $110.00 to $115.00 and gave the company a buy rating in a research report on Monday, June 19th. BidaskClub downgraded Kansas City Southern from a strong-buy rating to a buy rating in a research report on Thursday, June 22nd. Stifel Nicolaus reaffirmed a buy rating and issued a $108.00 target price on shares of Kansas City Southern in a research report on Friday, June 30th. Finally, UBS AG reaffirmed a positive rating and issued a $117.00 target price (up previously from $103.00) on shares of Kansas City Southern in a research report on Monday, July 24th. Nine investment analysts have rated the stock with a hold rating, ten have issued a buy rating and one has issued a strong buy rating to the company. The company currently has an average rating of Buy and an average price target of $109.19.

Kansas City Southern (KSU) traded down 1.88% during mid-day trading on Wednesday, reaching $99.98. The company’s stock had a trading volume of 1,003,559 shares. The company has a 50 day moving average of $105.71 and a 200-day moving average of $99.58. Kansas City Southern has a 52-week low of $79.05 and a 52-week high of $109.13. The stock has a market cap of $10.54 billion, a PE ratio of 20.12 and a beta of 0.81.

Kansas City Southern (NYSE:KSU) last posted its earnings results on Friday, July 21st. The transportation company reported $1.33 EPS for the quarter, beating the consensus estimate of $1.26 by $0.07. Kansas City Southern had a return on equity of 11.40% and a net margin of 21.52%. The company had revenue of $656.40 million for the quarter, compared to the consensus estimate of $627.81 million. During the same quarter in the prior year, the business earned $1.22 earnings per share. The firm’s revenue for the quarter was up 15.5% on a year-over-year basis. Equities analysts forecast that Kansas City Southern will post $5.17 earnings per share for the current year.

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Kansas City Southern announced that its board has authorized a stock repurchase program on Tuesday, August 15th that allows the company to buyback $800.00 million in shares. This buyback authorization allows the transportation company to repurchase up to 7.1% of its stock through open market purchases. Stock buyback programs are typically a sign that the company’s board of directors believes its shares are undervalued.

The firm also recently announced a quarterly dividend, which was paid on Wednesday, October 4th. Shareholders of record on Monday, September 11th were paid a dividend of $0.36 per share. The ex-dividend date was Friday, September 8th. This is a boost from Kansas City Southern’s previous quarterly dividend of $0.33. This represents a $1.44 annualized dividend and a yield of 1.41%. Kansas City Southern’s dividend payout ratio is presently 28.92%.

In other news, Director Henry J. Maier purchased 3,000 shares of the company’s stock in a transaction dated Thursday, August 17th. The stock was bought at an average cost of $106.19 per share, for a total transaction of $318,570.00. Following the purchase, the director now owns 4,159 shares of the company’s stock, valued at $441,644.21. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. Also, insider Delano Jose Guillermo Zozaya sold 6,000 shares of the stock in a transaction on Monday, August 28th. The shares were sold at an average price of $102.93, for a total value of $617,580.00. Following the completion of the transaction, the insider now owns 42,087 shares of the company’s stock, valued at $4,332,014.91. The disclosure for this sale can be found here. Insiders have sold 14,469 shares of company stock valued at $1,522,510 over the last 90 days. Corporate insiders own 0.95% of the company’s stock.

Institutional investors and hedge funds have recently made changes to their positions in the company. IHT Wealth Management LLC lifted its stake in shares of Kansas City Southern by 243.9% in the 2nd quarter. IHT Wealth Management LLC now owns 141 shares of the transportation company’s stock valued at $675,000 after acquiring an additional 100 shares during the last quarter. QS Investors LLC lifted its stake in shares of Kansas City Southern by 0.5% in the 2nd quarter. QS Investors LLC now owns 1,320 shares of the transportation company’s stock valued at $138,000 after acquiring an additional 7 shares during the last quarter. San Francisco Sentry Investment Group CA bought a new position in shares of Kansas City Southern in the 2nd quarter valued at $160,000. V Wealth Management LLC bought a new position in shares of Kansas City Southern in the 2nd quarter valued at $169,000. Finally, Advisor Partners LLC bought a new position in shares of Kansas City Southern in the 2nd quarter valued at $202,000. Institutional investors own 84.59% of the company’s stock.

Kansas City Southern Company Profile

Kansas City Southern (KCS) is a holding company. The Company has domestic and international rail operations in North America that are focused on the north/south freight corridor connecting commercial and industrial markets in the central United States with industrial cities in Mexico. The Company’s subsidiaries include The Kansas City Southern Railway Company (KCSR) and Kansas City Southern de Mexico, SA de C.V.

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