Out Fox The $treet

The purpose of a stock buyback plan should be to utilize excess cash to buy a significantly undervalued asset. In this case, the undervalued asset is the stock of the company involved. In order to even announce a buyback, the stock should be significantly cheap on a historical basis and future earnings expectations. For the stock to be significantly cheap, the company should be in a position that existing cash more » Disclosure: Long CSX. Please review the disclaimer page for more details. 

An amazing thing in the market are stocks such as Kansas City Southern (NYSE: KSU ) that are suddenly worth an amazing value such as $10 billion. How many social media stocks or recent IPOs does the market obsess about with market caps hardly above the $1 billion level? Railroads have been hot for years and Warren Buffett has already collected Burlington Northern for his Berkshire portfolio, yet how many people more » Disclosure: Long CSX. Please review the disclaimer page for more details. 

Friday was a wild day in the metallurgical (MET) coal sector as Patriot Coal (PCX), Walter Energy (WLT) , and Norfolk Southern (NSC) all made noteworthy announcements. With Patriot Coal and fellow met coal producer Alpha Natural Resources (ANR) both sinking more than 10%, one would assume that all of the announcements were negative. Summary of the announcements from Friday: Before the market opened, Patriot Coal put a major damper on the sector by announcing the closure of several high-cost met coal mines due to slumping demand for seaborne coal. During the day, Norfolk Southern announced the loading of the largest volume cargo in the history of Pier 6 at Lamberts Point. After the market closed, Walter Energy announced a reduction in 2012 production due to equipment and facility issues while announcing the market remains robust. (Walter still expects roughly 19% to 34% production growth for the year) Naturally the news for Patriot Coal is disastrous for the company. Yet another...