Q: I would appreciate if you can share your thoughts about CN & CP Rail with Buy, Sell or Hold rating for both.
5i Research Answer:
We would consider both as BUYS, with a caveat. They look good, and are well-managed. Lower interest rates and tariff relief if it occurs could help a lot. It is essentially a duopolistic industry in Canada (both do have US exposure also). Our main caution is economic. Canada is not in great economic shape and owning these stocks requires some belief that lower interest rates are ahead. This we agree on. However, recent US policy moves might throw a wrench into a recovery. If things get heated (with Greenland) then we do not think Canada will see much tariff relief in the short term.