Global Trade Facilitators – Part I

CP Train

There are thousands of companies which facilitate trade among countries. They help move goods from producers to consumers in the most efficient,fastest and cheapest ways possible. Billions of dollars worth trade occurs on a daily basis between partner countries. One way to profit from this trade system is to identify and locate firms that are involved in this process. Firms in many sectors may fall under this category. Some firms that can be included in this type of firms are in the transportation (shipping, railroads, trucking), courier, chemical, nuclear, food production, consumer goods, defense industry.

In this post, lets review a few companies that help countries trade with one another. I call these companies “Global Trade Faciitators” which is the title of this article. This is the Part I of this theme-based article.

1.How do finished goods like assembled cars, grains like wheat, lumber, minerals get moved from the resource-rich Canada to its largest trading partner US?
One way the above mentioned items are shipped from Canada to US is by two Canadian railroads – Canadian National (CNI) and Canadian Pacific (CP). These two large North American railroads transport all kinds of goods between the countries 24/7 – 365 days a year.

CNI has a dividend yield of 1.64% and a P/E of 13.3. S&P has a 4 star rating on this stock and CNI should generate more profits due to the opening of Prince Rupert Terminal late last year to capture overflow traffic from the LA and other western ports. Bill Gates bought a major stake in CNI a couple of years ago.

CP is a $9B company that operates in the western provinces. Some 50% of the shares of CP are held by institutions. It has an yield of 1.47% and S&P has rates it a 3 star stock.

2. How does a supplier in Shenzen, China ship an important business document (hard copy) to a buyer in Sao Paulo, Brazil?
Courier companies like Fedex(FDX), UPS Inc (UPS), DHL can help this Chinese supplier. Another company that can get the document all the way from Shenzen to Sao Paulo is TNT Express. This Netherlands based company’s stock used to trade on the NYSE. Now it trades on the OTC a TNTTY.

TNTTY has a dividend yield of 2.81% and has a market cap. of $14B.

3. How can a Swiss company benefit by offering its products and services to – say a country like China, India or Bolivia?
A Swiss giant like ABB can sell its power grid equipments and other infrastructure goods and services to developing and less developed countries and profit vastly from it.

ABB is a world leader in the infrastructure space.It can help countries electrical systems, build and operate power generation plants, automate train control systems etc. Motley Fool calls ABB – “The Little-known Massive Bluechip”.

ABB has a yield of 1.85% and a PE of 14.76

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