Is Union Pacific Corporation (UNP) a Good Investment After This Insider Sale?

Page 1 of 2

We track insider transactions because we believe that no one knows a company better than the people who work there. It has been proven that insiders tend to outperform the market by as much as 7% annually (read more about how this strategy can boost your returns).

In a recent Form 4 filing with the SEC, one of Union Pacific Corporation (NYSE:UNP)’s officers decided to sell off almost 20% of their shares. Barbara Schaefer, a Union Pacific Senior Vice President since 1997 and Union Pacific employee since 1981, sold 20,000 shares for an average price of $122.96 each. The sale comes after the company’s shares have seen appreciation of nearly 15% year to date. Although this insider has decided to cut their stake, we believe that Union Pacific is one of the better-positioned railway companies out there, and here’s why this move was likely just profit-taking at its finest.

David Shaw

The rail industry is expected to see rail rates rise 4% through 2012, despite the downward pressure of rail transport volumes due to reduced coal and agricultural shipments. Many energy companies traded out coal for natural gas as natural gas prices fell, and drought conditions negatively impacted crop yields. Both of these headwinds are expected to subside in the coming year, allowing Union Pacific to grow revenues over 6% in 2013 on the back of 4% volume growth.

Union Pacific also recently increased its dividend by 15% and now pays a dividend that yields 2.2%. Positives for Union Pacific investors, when compared to the other top rail companies, is that this rail operator has the lowest in-industry debt-to-equity ratio at 0.47, and one of the top returns on equity at 18%. Billionaire D.E. Shaw was the top fund owner for Union Pacific of those we track in 3Q with over 2.2 million shares (check out Shaw’s newest picks here).

Top Union Pacific competitor Kansas City Southern (NYSE:KSU) expects to see the majority of its growth come from long hauls originating from Mexico-based manufacturers—namely in the auto parts industry. Kansas City is expected to grow 2013 revenues by 12% and improve margins as its focuses on improving its equipment productivity with longer hauls. Billionaire investor Ken Fisher – founder of Fisher Asset Management – was the top fund owner of those we track with over 1.1 million shares at the end of 3Q (check out Fisher’s newest stock picks here).

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!