CSX Corp was and still is one of my favorite companies for this year. They were hit hard by some labor disputes and took a hit when fears of a double dip recession was looming. The labor issue was resolved, but the economy is still a question mark. The market does not seem to believe that a double dip recession is in the cards for the US unless Europe collapses. This possibility is real, but CSX is not an international company per se, so it will survive on US domestic shipping more than say Fed Ex would.
I am going to let the charts do the talking here. I picked 2 Years timeframe for looking at the data because I thought it reflects the relevant market impacts from the rally in late 2010 to the Tsunami in Japan and the turmoil in Aug 2011 followed by the European crisis.
Free Cash Flow (FCF)
Return on Invested Capital
Looking at the above charts one must see a strong potential for this company and an opportunity for picking up an undervalued stock. Let me know what you think?