Jim Cramer on CSX: "This Is a Company That's Going to Do a Lot of Self-Help"

CSX Corporation (NASDAQ:CSX) is one of the stocks Jim Cramer discussed, along with market shortages. Cramer mentioned the company during the episode and commented:

When CSX got rid of Hinrichs, they brought in this guy that we really like, a terrific replacement. His name is Steve Angel… He’s a great operator, but you know, not a railroad guy, but a great operator. The big question here is whether Angel was brought in to put CSX up for sale like he did with Praxair, or if the board simply wants him to build a better company… When CSX reported in October, Angel was asked that question point-blank, and he said he’s open to strategic opportunities, but he also pointed out that he ran Praxair for a decade before he sold it to Linde…

Still, Steve Angel is 70 years old, and while I happen to think that is like the best age in history to run a company, I don’t think he was brought in to run CSX for a decade before selling it. After all, they’ve really only got three years left to merge with another major railroad. I don’t see any other White House possibly letting that kind of deal through because this industry already has a high level of concentration… I gotta tell you, though, while I like CSX, I sure wouldn’t buy it purely for takeover speculation. I’d buy it because I think the business is set to improve dramatically this year and a lot of the big problems are behind them…

Putting it all together, you know what, I think CSX represents an excellent buying opportunity even after today’s 2.4% run. This is a company that’s going to do a lot of self-help, and the numbers should improve dramatically just because they plan to spend a lot less than they did last year. But the bottom line: While CSX should do fine, even in a fairly stagnant economy, I think it is going to be a big winner if the economy actually picks up steam and a humongous winner if they somehow manage to attract a takeover bid. Again, don’t buy CSX for that takeover speculation alone… It’s because the fundamentals are improving and there’s… chance that another railroad might want to merge with them. CSX, I liked Joe. I like Steve. I think it’s going to work.

CSX Corporation (NASDAQ:CSX) provides rail-based freight transportation, intermodal container movement, and trucking services. The company handles commodities like chemicals, coal, agricultural goods, and industrial materials.

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Disclosure: None. This article is originally published at Insider Monkey.