Many railroad companies have become more efficient, cutting costs wherever they can, which should help bolster their bottom line ahead. Additionally, market observers are optimistic about a cyclical recovery where U.S. consumers and businesses spend more, which would add to increased activity through railways and transportation sectors. Railroads are popular plays among some of the largest investors, including Bill Gates and Warren Buffett. [Sector ETF to Play Warren Buffett, Bill Gates’ Pick]
“It is not hard to find industrial stocks outside of the transportation sector that are also sporting bear-market returns. What is more troubling is that some of the better performers now look to be rolling over to the downside,” according to Barron’s.
Industrial Select Sector SPDR