10:26 ET – One positive for the rails in a dismal volume environment? Cash flow, says Bernstein. Rails are tightening the reigns on spending and future volume growth may need less investment for the next few years. “We think the market is warming to the value of this cash flow–as it explains higher stock prices despite slight revisions lower in forward estimates–but has perhaps not baked it fully into share prices,” the investment bank adds. Its picks are Union Pacific (UNP), CSX and Canadian Pacific (CP). (laura.stevens[a]wsj.com; [a]LauraStevensWSJ)
Copyright (c) 2016 Dow Jones & Company, Inc.