Morningstar has raised its recommendation on Asciano

 

News article: Morningstar has raised its recommendation on Asciano

[color=#333333][size=2][font=Arial, Helvetica, sans-serif]Morningstar raised its recommendation on Asciano to “hold” from “reduce” with a $5.

  JimYarin Chief Commissioner

Location: Adelaide, South Australia
Morningstar raised its recommendation on Asciano to “hold” from “reduce” with a $5.36 price target and said growth was largely a function of the economic cycle, demand for coal and agricultural conditions.
Morningstar has raised its recommendation on Asciano


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this business has turned the corner. recall when the stick was down in the mid $1.00. what a turnaround.  the mining boom has assisted in terms of coal but i would still like to see PN "develop" business rather than the operators just underbidding each other for the same business.

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  bevans Site Admin

Location: Melbourne, Australia
The management of Asciano have stuck it out and really turned the business around from the low depths of 2 years ago.    If I were a shareholder in the business what I would be looking for now, coupled with the changes to the coal demand is a strategy to diversify into new intermodal and other bulk products away from Coal.  Coal as a bulk is easy to do, but can Asciano as you suggest develop new markets like petroleum and mineral sands and gas??

There is still a hell of a lot of scope for inter-modal growth by partnering with property development groups for inland terminals.  Do Asciano have the vision, courage and the capital to do this?

What new terminals have seriously been developed since Yenora?

Regards
Brian
  Sulla1 Chief Commissioner

Aurizon's new cadre of North American senior managers have returned that company's focus towards being a rail business rather than a mining business during the last twelve months, PN needs to match that attitude to keep ahead in intermodal. One thing might be automotive business and what ports will become the major Ro-Ro terminals for Ford and GM imports.
  bevans Site Admin

Location: Melbourne, Australia
Aurizon's new cadre of North American senior managers have returned that company's focus towards being a rail business rather than a mining business during the last twelve months, PN needs to match that attitude to keep ahead in intermodal. One thing might be automotive business and what ports will become the major Ro-Ro terminals for Ford and GM imports.
Sulla1

Agreed.

However the biggest risk to PN's operations is a lack lustre Victorian vision.  More could probably be done in South Australia.  The risk to Asciano is they do not in my view appear to be leveraging their integrated logistics chain the way say Qube are now doing.

More intermodal from key sites and more key sites.  If they like coal then there are other bulk commodities which can be rail customer to rail customer but they require investment.

What do you think of bulk expansion?  petroleum? etc.  Business they arguably dropped in favour of coal.

Regards
Brian
  Sulla1 Chief Commissioner

Agreed.

However the biggest risk to PN's operations is a lack lustre Victorian vision.  More could probably be done in South Australia.  The risk to Asciano is they do not in my view appear to be leveraging their integrated logistics chain the way say Qube are now doing.

More intermodal from key sites and more key sites.  If they like coal then there are other bulk commodities which can be rail customer to rail customer but they require investment.

What do you think of bulk expansion?  petroleum? etc.  Business they arguably dropped in favour of coal.

Regards
Brian
"bevans"


I think petroleum could be worth watching...it looks like there will be big changes in domestic production and imports over the next few years. At the moment petroleum traffic survives at big long distance inland terminals like Mt Isa and Kalgoorlie. Mt Isa sees about 250,000 tonnes by rail (Shell and BP) and perhaps another three hundred thousand by road train that ought to be rail convertible  if someone wanted to chase it. Also in the North Queensland perspective is a plan by a major importer to make Mackay the main fuel port for NQ, which could mean more than one million tonnes of fuel needing to be road (or rail) hauled 400 km to Townsville or 700km to Cairns. I'm sure similar changes with refineries closing might make long distance railing from other states an alternative to building new port infrastructure in some cases for NSW, Victoria and SA.

Shale oil could be on the cards too, but the only likely deposit in the country that offers a chance of rail haul is the Julia Creek project, which could be worth watching.

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