SA: Canadian Pacific – my biggest supply chain bet

SEEKING ALPHA‘s Leo Nelissen writes:

– Canadian Pacific is my largest supply-chain bet as it benefits from a combination of all North American countries.

– In addition to that, Mexico is one of the biggest beneficiaries of an accelerating supply chain reconfiguration after the pandemic.

– The company is not cheap and suffers from economy-related de-risking, which is good as it comes with new buying opportunities.

Introduction

On February 24, 2022, I wrote my most recent article covering railroad giant Canadian Pacific Railway Limited (NYSE:CP), which is one of my largest long-term holdings. The stock has a 5.6% weighting in my long-term dividend growth portfolio, which holds 95% of my entire net worth. Needless to say, I only buy companies that I consider the best protectors and multipliers of wealth. Canadian Pacific is one of my favorites.

In my last article, I discussed its earnings, growth potential, and valuation based on forward-looking indicators. In this article, I will do things a bit differently. One of the reasons why I bought Canadian Pacific – probably the single biggest reason – is the acquisition of Kansas City Southern. I have frequently covered this on my Twitter as well as we currently witness a few geopolitical and economic trends that support this thesis. As I got a number of questions on social media, Seeking Alpha, and via mail, I’m using this article to update my thesis as CP is set to be a big winner in the decades ahead if I’m right…

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