No. of Recommendations: 11
Dealraker's conversation with NSC management:
D: "Remember just back in 2017..."
NS: "Whut's up dude?"
D: "Stockholder's equity was $12 bil, debt $9 bil..."
NS: "So...whut's the big deal...deal?"
D: "Now stockholder's equity $12 bil debt $16 bil and it rose 2 bil kinda fast so..."
NS: "You say we might have an addiction or something?"
D: "You got it dudes!"
Footnote: Management splurged buying 2.2 bil of stock at 35% above the current price just recently, then bought half a bil more at 20% higher. Today? You can be 100% certain the "Let's conserve cash and get down the debt" is going to be the focus coming up at some time, yet at some point.
And your stock supporting buybacks, significant buybacks, will cease for a long-long-long time. Predictable things are simply predictable. Meanwhile the swarming euphoric articles screaming "buy NSC...look at this fabulous chart and don't miss out" are long gone, not coming back anytime soon.
It was all a part of the HH envy machine all while he chain smoke cigaretts and took a few hundred mil from CSX while cutting employee benefits to the bone, not even one day of sick leave? Really? Cut employees, cut yards, cut lines, cut cap ex, buyback stock with debt, and god forbid whatever you do either leave for another railroad or die...whichever works best for you. Short term people love this stuff; long term despise it all.
All while long term shareholders just watch and shake their heads. Been here, done that, too many times in my life. When you take a chaisaw to a business you get a chainsaw outcome.
