While it isn’t the strongest of days for the market overall, we’re nevertheless surprised by the weak rally in railroad stocks, after Warren Buffett’s huge Burlington Northern (BNI) bid.
His $100 BNI offer was clearly a strong sign of his confidence in the rail industry, even beyond BNI alone.
Thus it is peculiar that investors have only bid up names like Union Pacific, CSX, and Norfolk Southern 4-7%. These stocks remain below 52-week highs despite Buffett bidding above BNI’s. As always, this is meant just as a starting point, everyone should do further due diligence.
Union Pacific (UNP)
Norfolk Southern (NSC)
The author happily owns shares in BNI, but does not own any shares or options in UNP, CSX, or NSC.