The Successful Investor Hotline – Friday, July 12, 2013

Article Excerpt

CANADIAN PACIFIC RAILWAY LTD., $131.73, Toronto symbol CP, continues to benefit from rising shipments of crude oil by rail. That’s because a lack of pipelines is forcing producers to find other ways to transport their oil to refineries. However, last Saturday’s derailment and explosion of a train hauling crude oil in Lac-Mégantic, Quebec, could slow down the oil-by-rail boom. (Note: a rival firm, Montreal, Maine & Atlantic Railway, operated this train, not CP.) The crash will likely lead to new regulations, such as requirements for thicker-hulled tanker cars that can better withstand collisions. Regulators may also demand that railways place more workers on their trains and install automatic braking equipment. New regulations could make it harder for CP to achieve its cost-cutting targets. However, they would apply to all railways. Moreover, crude oil accounts for just a small fraction of CP’s overall business. As well, CP announced this week that it has signed an exclusive, long-term deal to haul potash from a new…