We met Peter Thomason's bullish paper on the replacement of United Pacific Corporation (UNP) by Peter Thomason. In this article, we will summarize the Bulls' paper on UNP. As of May 8Th. According to Yahoo Finance, UNP's lagging and forward P/E are 19.54 and 18.55, respectively.
The slow-moving freight train reveals the importance of railway equipment.
Union Pacific Corp represents a long-term, resilient investment opportunity rooted in the structural advantages of the railway industry. Railways provide the most cost-effective and carbon-efficient way to transport goods from long distances, especially when compared to trucks and aircraft. While large cargo ships are cheap, their uses are limited to accessible routes, and railways are the most feasible and essential inland freight solutions. The North American rail market is an oligopoly dominated by only seven major players in the United States, Mexico and Canada. Once a railway operator has established an extensive rail network, it can basically ensure a monopoly on the transport corridors it serves. This creates significant entry barriers, as it is unreasonable for competitors to establish parallel infrastructure in overcapacity and mutually beneficial price wars. Regulatory barriers and expansions need to further block new entrants. As a result, Union Pacific and its peers operate in a protected environment with lasting prices and reliable cash flows. Although the return on capital is reliable, not spectacular, the predictable nature of the business, limited competition and high operating leverage ensures that United Pacific remains a long-standing important investment.
Union Pacific Corporation (UNP) is not on our list The 30 Most Popular Stocks in Hedge Funds. According to our database, at the end of the fourth quarter, the 93 hedge fund portfolio was 78 in the previous quarter. While we acknowledge the risks and potential of UNP as an investment, our belief is that certain AI stocks have greater expectations and provide higher returns over a shorter time frame. If you are looking for more promising AI stocks than UNP, but their earnings are trading at less than 5 times the price, check out our report Cheapest AI stocks.
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Disclosure: None. This article was originally published in Insider Monkey.