Kansas City Southern is about to release earnings. Ponder these Bear Case Scenario’s:
Railways need to spend copious amounts of capital on maintaining and upgrading road beds. If this gets away from them you have costly derailment with unhappy customers, screaming union labour, incredibly bad publicity and flinty eyed regulators looking up your you know what.
Kansas City leases much of its rights of way. Leases end and are expensive to impossible to renew if the line is profitable.
Kansas City is exposed to both Mexico and Panama. The political dynamics are always suspicious and problematic.
George Gutowski writes from a caveat emptor perspective.