The stock market has certainly seen its share of ups and downs recently, which can leave investors feeling a little uncertain. After a major drop in the markets around the world this week, analysts now fear a bear market. In fact, it’s pretty much all but certain.
However, these times when the market dips can actually be good opportunities to invest in strong companies at prices that might be lower than they were before. One company that looks particularly interesting in this context is Canadian National Railway (TSX:CNR). So let’s look at why CNR stock could actually be the opportunity you’ve been waiting for.
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Recent performance
CNR stock has been a fundamental part of the Canadian transportation industry for many decades. As of writing, the price of its stock is around $136. If you compare that to its highest price over the past year, you’ll notice that it has come down by about a whopping 24%. This kind of drop can be a potential entry point for investors who are thinking about the long term.
Looking at how CNR stock has been performing, in the most recent earnings report for the last three months of 2024, CNR stock reported revenues of $4.3 billion. That’s a 5% increase compared to the same period the year before. CNR stock’s net income, which is their profit after all expenses, was $1.2 billion, working out to $1.69 per diluted share. This is an improvement from the $1.43 per diluted share reported in the fourth quarter of 2023. The company said this growth was due to moving more freight and managing their costs effectively.
Down, but not out
Even though the stock price has come down recently, the underlying business of CNR stock still looks strong. The railway operates a vast railway network that spans both Canada and the United States, providing essential transportation services for a wide range of industries. It has different sources of revenue and has been strategically investing in infrastructure. Therefore, CNR stock seems well-positioned for growth in the future.
Investing in CNR stock during this downturn could be a sensible move for those who are looking to hold onto a reliable stock for the long haul. The company has a history of consistent performance, and also has a commitment to returning value to its shareholders. This value creation comes through acts like dividend payments and buying back some of its own shares. They can make the stock quite appealing to investors.
Of course, it’s always a good idea to do your own thorough research and think about your personal financial goals and how much risk you’re comfortable with before making any investment decisions. Consulting with a financial advisor can also give you personalized advice that’s tailored to your specific investment strategy.
Bottom line
While the ups and downs of the stock market can be a bit unsettling, these moves can also create opportunities to invest in fundamentally strong companies like CNR stock at more attractive prices. This might be a good time to consider buying the dip and holding onto the stock for the long term.
