All class 1’s are showing better profits than analyst’s predictions for their third quarter.
If I was to invest in purchasing UP or BNSF, which would show the best returns for my outlay in your opinion? Also let’s compare NS and CSX and then CP or CN. I seem to recall that these same analysts had after the second quarter predicted a drop in car loadings for the third quarter of many commodities and said that shares would drop in value.
I may be wrong in the above statements. I will be meeting with my bank’s investment councelor in a few weeks and possibly be purchasing some U.S. railroad stock and would like to be able to sound a bit knowledgeable on this subject. As I write this the Canadian dollar is on par with the U.S.
The only problem you would have in purchasing the stocks mentioned, is with the BNSF stock. It is no longer traded as BNSF stock since Warren Buffett bought the Corporation. You could buy Berkshire-Hathaway Stock ( Buffett’s Stock) and in that way indirectly you could have a piece of BNSF.
The rest of the Railroad’s stocks are publicly traded.
The linked article will explain what happened in the Warren Buffett purchase:
I was aware that Warren Buffett bought out BNSF and that he controlled Berkshire, but thought that BNSF would be traded seperately from his Berkshire holdings.
This is the type of information I’m looking for. Thanks/
It looks like rail shares might be a good investment at the moment. It is the only industry in the country which I’ve heard is investing in the future with property upgrades and new equipment purchases. All other industries/business seem to be looking at off shore facilities for manufacturing and employment. Although, I should temper that with good reports from American car makers which contridicts me somewhat.
IMO UP is the definite “buy,” has been for several quarters, and is said to still be underpriced. It is a company in the right business, and it is planning for the future with investment in infrastructure. It’s greatest challenge right now (probably) is how to deal with HSR (and SSR !) desiring to use its ROWs.
Well, that’s likely a much smaller problem/ risk now, in view of all the recent cancellations/ delays/ re-reviews/ funding withdrawals/ election results, etc. as detailed on other threads here . . . [:-^]
And don’t buy a stock just because you like the color scheme on the locomotives ! (unless you can afford to lose most of your investment) Instead, I strongly encourage anyone thinking of doing this to thoroughly research the stock and company - and consult with a trusted and qualified investment adviser to double-check your rationale and methods - before investing a significant amount of money in anything. For someone who is thinking of doing this, you should be aware that there is a significant risk of over-concentration in this sector, and of your resultant vulnerability if something goes wrong, such as happened to the Enron employees whose 401k investments were all in Enron shares - here with the railroads, it could be re-regulation, ‘cap-and-trade’ or greenhouse gas tax on coal, PTC being way more expensive and cumbersome than anticipated, market shifts, etc. At minimum read the ‘Management’s Discussion’ of the most recent Annual Report, and look at the quarterly presentations o
Thanks for your information. No, I am not jumping into this venture and I will be doing some research. I was thinking of 3 to 6 months before I purchase RR shares. With what you say I’ll change that to at least one year. With what you say about buying RR stock cause of the colour scheme of their locos. I just got back from a trip on The Empire Builder Chicago/Seattle and the Zephyr Emerson/Chicago. BNSF certainly has some great looking locomotives I was impressed with the number of coal trains on the BNSF and was told that this was one of their most profitable commodities.
The trip took me a total of over 6,000 miles and I’ve just booked my Amtrak out west for August next year tto cover over 8,000 miles. Thanks again Paul
The ‘original’ shares, now called “A” shares - ticker symbol “BRKA” or “BRK-A” - were trading at around $121,000 per share today. But the “B” shares - ticker symbol “BRKB” or “BRK-B” - are only a small fraction* of the “A” shares, and were trading at around $80 today.
*That fraction - which used to be 1/30, if I recall correctly - was further reduced by a factor of 50 or 60 especially for the BNSF acquisition, so the “B” shares could be swapped for small quantities of BNSF shares held by individual investors like me.
However, if you buy any B-H shares today, BNSF is only something like 1/5 or 1/4 of that company, so your railroad ‘interest’ is diluted pretty much by the other B-H businesses, such as insurance, etc.
As a modest railroad investor, I would caution you to try to get in at the right price. Study the history of the price of the stock – easily done on the Internet. You might be getting in at the high end, with the perils mentioned by Paul North waiting in the wings.
But don’t be chicken, either. The rails have so positioned themselves that they have earned the right to succeed – provided the politicians and NIMBYs don’t monkeywrench them.
A consideration is, does the stock pay dividends? I was so ignorant, I bought 100 shares of Kansas City Southern without realizing it pays no dividend on its common stock. I still think KCS is a good bet, kept it and after a 3-year wait am finally making money – on paper.
Good luck! I will say from my experience that owning railroad stock is fun and gives you an extra rooting interest in your favorite industry.