The Surprising Reason Why Railroad Stocks Doubled the Market in the Last 5 Years

You don't always need to invest in hot technologies or glamorous business sectors in order to generate market busting returns. That's a fact that investors in the railroad industry will be more than happy to attest to. And they can, because the average share price growth of Union Pacific (NYSE: UNP), CSX (NASDAQ: CSX), Norfolk Southern (NYSE: NSC), and Kansas City Southern has more than doubled the gains of the S&P 500 index over the last five years. Let's take a look at why, and what investors can expect in the future from the sector.

The major development in this industry over the last few years has been the wide-scale adoption of what's known as precision scheduled railroading (PSR) management techniques. In a nutshell, they are initiatives designed to allow the companies to move the same amount of carloads using fewer assets.

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Source Fool.com