Here's Why We Think Canadian National Railway (TSE:CNR) Is Well Worth Watching

Simply Wall St.11-08

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But as Peter Lynch said in One Up On Wall ...

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But as Peter Lynch said in One Up On Wall ...</p>\n\n<a href=\"https://finance.yahoo.com/news/heres-why-think-canadian-national-133611721.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TSE","symbol_name":"Trinseo","start_time":0,"source_url":"https://finance.yahoo.com/news/heres-why-think-canadian-national-133611721.html","article_id":"2481815109","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/Khge3tLQn1LkSJOfEzgCcQ--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/3b2b38d3f6e8d2a909f30af14aecedb0"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2481815109","pubTimestamp":1731072971,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Canadian National Railway . While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.Check out our latest analysis for Canadian National Railway. How Quickly Is Canadian National Railway Increasing Earnings Per Share?While Canadian National Railway insiders did net CA$2.9m selling stock over the last year, they invested CA$3.8m, a much higher figure. You could argue that level of buying implies genuine ","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"TSE":"Trinseo","EBIT":"Harbor AlphaEdge Small Cap Earners ETF","BK4090":"商品化工","BK4016":"铁路","CNI":"加拿大国家铁路"},"translate_title":"这就是为什么我们认为加拿大国家铁路（TSE：CNR）非常值得关注","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CNI":1,"EBIT":1,"TSE":1},"content_text":"It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad. \n So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Canadian National Railway (TSE:CNR). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it. \n Check out our latest analysis for Canadian National Railway \n How Quickly Is Canadian National Railway Increasing Earnings Per Share? \n The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Canadian National Railway managed to grow EPS by 9.1% per year, over three years. That's a good rate of growth, if it can be sustained. \n Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. It seems Canadian National Railway is pretty stable, since revenue and EBIT margins are pretty flat year on year. That's not a major concern but nor does it point to the long term growth we like to see. \n You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers. \n\n\n\n  TSX:CNR Earnings and Revenue History November 8th 2024\n \n\n The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for Canadian National Railway's future EPS 100% free. \nAre Canadian National Railway Insiders Aligned With All Shareholders?\n Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, small purchases are not always indicative of conviction, and insiders don't always get it right. \n While Canadian National Railway insiders did net CA$2.9m selling stock over the last year, they invested CA$3.8m, a much higher figure. You could argue that level of buying implies genuine confidence in the business. It is also worth noting that it was Independent Chair of the Board Shauneen Bruder who made the biggest single purchase, worth CA$1.0m, paying CA$168 per share. \n Along with the insider buying, another encouraging sign for Canadian National Railway is that insiders, as a group, have a considerable shareholding. Indeed, they have a considerable amount of wealth invested in it, currently valued at CA$2.6b. Investors will appreciate management having this amount of skin in the game as it shows their commitment to the company's future. \n Should You Add Canadian National Railway To Your Watchlist? \n As previously touched on, Canadian National Railway is a growing business, which is encouraging. Better yet, insiders are significant shareholders, and have been buying more shares. That makes the company a prime candidate for your watchlist - and arguably a research priority. You should always think about risks though. Case in point, we've spotted   1 warning sign for Canadian National Railway  you should be aware of. \n There are plenty of other companies that have insiders buying up shares. So if you like the sound of Canadian National Railway, you'll probably love this curated collection of companies in CA that have an attractive valuation alongside insider buying in the last three months. \nPlease note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.\nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. 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