Buy between 15 and 20 ; this is a rail road

feel major carrier will merge/purchase

"Why look at that one when there are plenty of great railroads? I like Union Pacific (UNP) but they're all better than yours." "Mad Money Lightning Round," 4-28-09

3 Stocks I Saw on TV: Dan Fitzpatrick examines three stocks viewed on Fast Money. Today's stocks include Kansas City Southern, Wimm Bill Dann Foods, and SPDRs Industrials ETF.
Click here to watch the video.

Outperform - Price 16.59 on Dec. 17
by Morgan Keegan

The refinancing of the $200 million, 7.5% senior notes due June 2009 has been an issue of concern for investors. While KSU is refinancing at higher rates, we believe [this is] a net positive for KSU long-term as it pushes out the refinancing of its bank lines...into 2011 and 2013 and clears up a major overhang for the stock recently. At 8.5 times and 7.7 times our 2008 and 2009 earnings estimates, shares are...trading at steep discounts to historical...P/E average multiples...We believe the [share] sell-off is overdone, and creates a buying opportunity for investors. KSU remains the only true growth story of the U.S. Class 1 railroads and has significant new business opportunities. Market cap: $1.5 billion.

Bramwell also likes IBM (IBM) and its exposure to fast-growing overseas economies, and Kansas City Southern (KSU) railroad as a play on growing international trade. Peabody Energy (BTU) should benefit from growing demand for coal, she says.

Kansas City Southern operates 3,200 miles of track in the central and southern U.S. and is the smallest Class I railroad, with a $4.6 billion market cap. It hauls a diverse mix of agricultural/food (19% of revenue), chemicals (18%), forest products (14%), coal (11%), intermodal (8%) and automotive (6%). Remaining revenues are derived from operating long-term concessions on 2,700 miles of rail in Mexico, and 47 miles next to the Panama Canal.

New port in Mexico, replacing much traffic in Cal.

Kansas City Southern (KSU) was downgraded at UBS. Rating lowered to Neutral from Buy. Reiterates 2008 EPS estimates of $2.04 and $44 price target.

It's a growth/value stock