Jim Cramer Thinks These 10 Stocks Deserve Your Attention

8. Norfolk Southern Corp. (NYSE:NSC)

Number of Hedge Fund Investors: 50

Jim Cramer highlighted that Norfolk Southern Corp. (NYSE:NSC) is investigating CEO Alan Shaw over claims of an inappropriate workplace relationship, as reported by CNBC. Norfolk Southern Corp. (NYSE:NSC) confirmed the investigation into Shaw, who has played a key role in leading the turnaround of the railroad. While Shaw has been credited for effectively managing the company’s response to the toxic train derailment in Ohio, Cramer expressed uncertainty about whether Norfolk Southern Corp. (NYSE:NSC) remains a buy given the ongoing probe.

“Norfolk Southern is investigating CEO Alan Shaw over allegations of an inappropriate workplace relationship, CNBC reported Sunday. The company later confirmed the probe into Shaw, who has been behind the turnaround at the great railroad. It’s not clear whether the stock can still be bought here. Shaw has done a very strong job after the toxic train derailment in Ohio.”

A positive outlook on Norfolk Southern Corp. (NYSE:NSC) is supported by its strong financial performance, strategic operational improvements, and consistent shareholder returns. In Q2 2024, Norfolk Southern Corp. (NYSE:NSC) exceeded earnings expectations with an EPS of $3.06, surpassing the forecast of $2.86, and generated $3.04 billion in revenue, showing resilience in a challenging freight market.

Norfolk Southern Corp. (NYSE:NSC) is focused on improving efficiency, targeting an operating ratio of 64%-65% for the second half of 2024, and expanding its rail services to connect Mexican manufacturing with the Southeastern U.S. Norfolk Southern Corp. (NYSE:NSC)’s long-term strategy includes investing in service quality and productivity, and the recent resolution of a major $600 million lawsuit enhances its growth prospects.

Norfolk Southern Corp. (NYSE:NSC)’s strong dividend history—having increased payments for seven consecutive years with a yield of around 2.42%—demonstrates financial stability and appeals to income-focused investors.

The London Company Large Cap Strategy stated the following regarding Norfolk Southern Corporation (NYSE:NSC) in its Q2 2024 investor letter:

“Norfolk Southern Corporation (NYSE:NSC) – NSC pre-announced weaker results in early April. Revenue declined in its latest quarter driven by lower fuel surcharges, an unfavorable product mix, and lower intermodal ancillary fees. Costs continued to rise. Activist involvement may lead to lower costs in the future. Added to the position following recent weakness in the shares. We believe the competitive advantages are intact and valuation is attractive.”