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Stock impact report

Union Pacific: The Velocity Thesis [Yahoo! Finance]

Union Pacific Corporation (UNP) 
Last union pacific corporation earnings: 4/23 08:00 am Check Earnings Report
US:NYSE Investor Relations: up.com/investors
Company Research Source: Yahoo! Finance
dependent on how fast UP's assets turn than on macroeconomic fortune. To make this investment opportunity testable, I'm focusing on one number: freight-car velocity, i.e. how many miles per car per day the railroad's fleet is moving. Increased velocity decreases cycle time, increases the number of loads each car and locomotive can haul, reduces both labor and fuel costs per gross-ton-mile, and provides the justification to set prices. All of these physical advantages appear as mechanical advantages in the form of a lower operating ratio, increased EBIT (earnings before interest & taxes), and more consistent free cash flow. The moat (i.e., rights-of-way that cannot be duplicated, franchise tenure, and network density) creates the possibility; velocity translates that possibility into dollars. Thus, the thesis is testable and verifiable. Therefore, if Union Pacific Railroad maintains freight-car velocity in the range of the mid-200s miles per car per day and pushes velocity toward the l Show less Read more
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