Let it snow
Dan Caplinger (Vail Resorts): People have shifted their consumption habits, choosing not to accumulate as much stuff in favor of giving themselves experiences they can treasure forever. That trend, along with the ongoing popularity of winter sports, has brought skiing and snowboarding into the limelight, and Vail Resorts has worked hard to give snow enthusiasts the most extensive network of ski resort locations in its widespread network. From Australia to both coasts of North America, winter sports fans will find Vail properties, including the Whistler complex in British Columbia and some of the highest-profile resorts in Colorado and the Lake Tahoe area.[A multi-colored bar graph with an upward-pointing growth arrow.
August is a good time to look closely at Vail Resorts, because most investors don't pay much attention to the company during its off-season months. Yet now's the time that you can get the best read on season ticket sales for the 2018-19 winter season, and already some of Vail's preliminary numbers show that its acquisition strategy has kept drawing new customers. Bullish shareholders are hopeful that a return to more normal winter weather conditions will help make Vail's locations more popular than ever. With quarterly results not due out until September, interested investors can get a jump on establishing positions if they like the strategic plans that the ski resort giant has for the years to come.
There's no stopping this train
Neha Chamaria (Genesee & Wyoming): "In terms of the pricing environment and the capacity environment, it's a good time to be in the railroad business," said railroad giant CSX's CEO, James Foote, during the company's latest quarterly conference call. The optimism runs across the board, with short-line rail leader Genesee & Wyoming even delivering double-digit growth on its top line in the last two quarters. In fact, the company's revenue, operating income, and operating cash flows have grown at a torrid pace in the past five years, handily beating industry averages.
A couple of things have worked in Genesee & Wyoming's favor. First is diversification: The company's operations are widespread across North America, U.K., Europe, and Australia, its top 10 customers make up only about a quarter of its revenue, and no single commodity contributed more than 13% of its sales last year. That hugely helps the company balance out weakness in some commodity markets with strength in others, helping it keep its head above water even during weak business cycles.
Second, aggressive capital spending has turbocharged Genesee & Wyoming's growth in recent years. Key examples include big-ticket acquisitions like RailAmerica and U.K.-based Freightliner Group and joint venture with Macquarie Infrastructure and Real Assets in Australia. Management is keen to explore further opportunities.
Genesee & Wyoming shares have recovered sharply since April after a dismal start to the year. Investors are perhaps taking note of the company's consistently strong operational performance and rightly so. The railroad's strong Q2 numbers and outlook for the year released late last month sets the perfect stage for investors to load up on the stock this month for the long haul.
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