The first stock pitch of the year! On Tuesday, November 29, Austin Marcus pitched CSX, a class 1 American railroad company headquartered in Jacksonville, Florida. CSX has 21,000 route miles of rail, located primarily on the East Coast. They transport everything from agricultural products to forest products, coal, and intermodal containers. As Austin stated in class, the railroad industry is highly dependent on the price of commodities. While one fear for the entire rail industry is the steeply declining price in coal, Austin affirmed that CSX is relatively hedged against this price cut, as they only transport Illinois Basin Thermal Coal, one of the few remaining profitable types of coal.
CSX has made massive investments in infrastructure to make their cars capable of intermodal transport – the ability to take standardized shipping containers straight off of a ship onto a rail car. Investments have also been made to make most of their railcars able to be stacked two containers high. As this infrastructure is relatively new, CSX has yet to realize gains from these newfound efficiencies. Austin believes the time is right to invest. A motion was made to buy 500 shares of CSX by selling 573 shares of Allison Transmission. The motion passed 21:1.