What are the best railroad stocks?

Question

Seems like the best near-term alternative to oil, at least for shipping purposes. I know they're prospering in Europe due to the even higher gas prices there. Thanks for your help!

Answer 1

Union Pacific, CSX

Answer 2

BNI Burlington Northern Santa Fe is a good one.  They take coal from Wyoming's Powder River Basin and ship it to Seattle (where it is then shipped to China).  On the return trains they take Seattle's garbage to dump into the empty coal mines.

Norfolk Southern (NSC) is also one I like as Europe is using a lot of our coal taken by NSC from the Appalachian mines to the East Coast ports.

And with the North American Free Trade Agreement, Kansas City Southern is in a good spot to haul everything between Canada and Mexico.

I think it was a few days ago Cramer said he didn't like CSX as much as the other RRs.

Answer 3

I would wait till we get a new precedent. The stocks will be all crazy like till the end of the elections, then i would go for fuel cells.

trains might work short term, but gas is going to go down, and until trains deliver to your door i doubt they make that big of a profit.

Answer 4

I personally like KSU - Kansas City Southern, it has run up a bit but so have all the rails.  The reason I like this play is they operate not only in the US, but run in Mexico and the Panama Canal as well.  If our economy does go in the tank, you at least have the Mexico and Panama plays.  You could argue that if we tank, they will as well, but I like having those foreign ties.  I don't see oil going down anytime soon and coal is getting a lot of talk.  Coal is shipped via rails so the good times should continue.  One more plus is because it is a smaller rail it could get bought out by one of the big boys since they have all this extra cash now.

Answer 5

Well, there are really only 5 to choose from so your chance of picking the best is 1 in 5.  

NSC  Norfolk and Southern

BNI   Burlington and Northern

UNP  Union Pacific

CSX  CSX Corp

CP  Canadian Pacific

Personally,  I have always leaned toward UNP because of it long haul trackage.

Buffet is in favor of BNI and also has a position in NSC.

If the U S policy makers had any brains at all, which unfortunately they do not, they would be spending billions on rail transportation upgrades instead of on hiways and air transportation.  It will however take some time for that realization to sink in, probably another 20 to 30 years.  They are very slow learners. Not only is rail much much more efficient in energy usage about 7x more efficient than truck and 50x more efficient than air, but it is also the only form of transportation currently that does not require oil as a fuel to operate.  It can run very well on nuclear generated electricity.  

In England,  trains run about every 30 minutes to most of the major cities.  Here in the U S, if you do not live in the Boston to Washington corridor, you can forget about taking a train.  The schedules stink and they virtually never run on time.  New York and Chicago do have excellent rail service called respectively subway and elevated.

Even between Boston and Washington, it takes 7 hours to go a mere 450 miles.  London to Paris is under 3 hours, a distance of 300 miles and a round trip fare is about $166 even taking into account the exchange rate of the dollar.  Round trip Boston to Washington is about $200 but can be more than $400 depending on the particular train you take. Imagine 7 hours to go 450 miles.  An absolute disgrace.