The investment thesis behind buying railroad stocks got a boost recently with the earnings report from the smallest Class 1 railroad, Kansas City Southern (NYSE: KSU). Let's take a look at what happened, and why investors should be feeling a bit more positive after management's commentary.
There are three main parts to the argument for buying the U.S. listed class 1 railroads, CSX (NASDAQ: CSX), Union Pacific (NYSE: UNP), Kansas City Southern, and Norfolk Southern (NYSE: NSC). As follows:
Increasing train length is a key aim of precision scheduled railroading management techniques. Image source: Getty Images.