INT was sold for $US 36.24 on August 2, 2013. The stock was initially purchased for $US 34.10 on May 14, 2009 and split 2 for 1 on December 8, 2009. You can do the math on the outcome of the trade.
I sold INT light of the uncertainties surrounding liability for the train derailment and subsequent fire at Lac-Megantic, Quebec on July 5, 2013. The Bakken crude on board was being shipped for INT by the Montreal, Maine & Atlantic Railway, operator of the train which derailed in the heart of the town. Although INT claims that its insurance will cover potential costs, the issue will be a drag on its balance sheet for several reasons:
- costs associated with the clean-up, liability and the like are yet to be resolved and may be very significant depending on decisions in the courts;
- INT's legal costs will be significant
- INT's "share" of the costs is uncertain
I like the World Fuel Services business model. It has a successful record of incorporating new acquisitions into company operations.
I will continue to monitor the outcome of Lac-Megantic tragedy but figure that the resolution of liability claims will drag on in the courts for many years.
An associated development: rail companies have announced that they will voluntarily adopt stricter safety measures in an effort to avoid recurrences of this nature in the future. However, the self-regulation model invoked by government in response to industry lobbying and efforts to contain costs appears not to be working. In more and more instances, industry regulatory bodies appear NOT to be accountable. Further, government "overseers" are too thin on the ground and are not qualified to work effectively as they either do not have the practical experience or ability to put "boots on the ground" to see what happens in the real world of rail transport. The model is broken and needs to be revisited.
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