The table above presents the seven largest companies by market cap in the ETF Innovators [ETFI] Global Railroad PerformIdex among 53 total companies with market caps over $150M which are active in the railroad industry, including rail transport, rail infrastructure, and railcar manufacturing. The Railroad Index fared better than the iShares Dow Transports (IYT) over the past year and the PowerShares Progressive Tranporation Portfolio (PTRP) since its inception in late September.
However, the tabe included below illustrates weak performance among the eight largest North American rail transport companies, with an average loss of 23% in market value in the past year, including: Burlington Northern (BNI), Union Pacific (UNP), Norfolk Southern (NSC), Canadian National (CNI), CSX Corp (CSX), Canadian Pacific (CP), Kansas City Southern (KSU), and Genesee & Wyoming (GWR).
The best performing group in the index was the 21 rail transport companies based in Japan, which posted a gain of 1.5% as an equally-weighted average return in the past year with an average market cap of $4.9B U.S. Dollars.
Railroad companies should benefit both directly and indirectly from President-Elect Obama's plans to invest heavily in infrastructure spending as part of a plan to revive the overall economy and create at least 2.5M jobs. Aside from the direct benefit to rail infrastructure companies such as L.B. Foster (FSTR) and Trinity (TRN), rail tranpsort companies should also benefit from increased demand for their services to move around the basic materials used to build new bridges, roads, and other projects.
$15.46 (12/20/08)
