Union Pacific’s stock carries the highest price to book ratio among the six Class I Railways. It is about a 1.43 times factor over the next best price to book ratio of CSX at 4.73. Strong price to book ratio investments infrequently have deep or extended price depressions. Therefore, an investor must be patient and wait for opportunities to buy.
Month: November 2019
Today is November 15, 2019 and Canadian Pacific Railroad recovered in accordance with my railroad fund investment model to $241.47 per share. The value investing model automatically sold at $241.47 and the price per share continued to climb to $241.86 when the market closed at 4 PM. This sale generated a 9.31% return on the investment over 27 days. Annualized return is > 100%.
With stock investing, one of the valuation ratios used is the price to book ratio. It identifies the spread between book value and market value for a share of stock. As the spread increases the ratio increases. A good example is Coca-Cola. Its price to book ratio hovers in the 11 range. Coca-Cola is a Dow Jones Industrial top 30 stock.