CSX Corp. (NYSE:CSX) — The operator of the largest rail network in the eastern United States is expected to be driven higher by an increase in foreign coal shipments and auto and international container shipments.
Profit margins are expected to rise in 2012 due to an increase in volume and productivity. Earnings are also expected to rise from $1.67 in 2011 to $1.84 in 2012. Credit Suisse sees steady growth ahead and has a target of $28 on the stock.
Technically the stock had been consolidating just under its 50-day moving average at $22. Our proprietary internal indicator, the Collins-Bollinger Reversal (CBR), flashed a buy at $20 on June 4, and within 10 days, the stock had advanced through resistance but then pulled back to support at $21.
Buy CSX at the market with a target of $27, and while you wait for a breakout you will receive an annual dividend of 2.6%.