Kansas City Southern (KSU)

The Kansas City Southern owns one of the most important pieces of track in the South. The Meridian Bypass from Meridian, Mississippi to Dallas, Texas is a hurricane proof link from the Atlanta hubs of the CSX and Norfolk Southern railroads to connections with the Union Pacific and Burlington Northern/ Santa Fe.

Whan Katrina struck the Gulf Coast it stopped all traffic between Mobile and New Orleans. The Bypass was able to take its place.

Even in good weather, the Huey Long bridge across the Big Muddy is a transportation bottleneck that adds a day or more to through trains.

With the completion of double tracking of the Bypass and installation of Centalized Train Control, traffic capacity will more than double.

KCS has heavily invested in the deepwater Mexican port of Lazaro Cardenas. With most Pacific North American Ports at or near capacity, KCS's position at this new intermodal transport hub could reap significant benefits in the coming years.

EBIT Margin has increased significantly over the past three years through continued cost cutting initiatives. Management has delivered on its goal of reducing operating ratio (inverse of operating margin) below 80% and will see further benefit as revenue increases.

EBIT Margins 2005 - 4.6% 2006 - 18.3% 2007 - 20.8% 2008 - 21.0% (LTM)