Here’s Why Bretton Fund Sold Union Pacific Corporation (UNP)

Bretton Capital Management, an investment management company, released the “Bretton Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned 8.21% compared to 8.12% for the S&P 500 Index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Bretton Fund highlighted stocks such as Union Pacific Corporation (NYSE:UNP). Union Pacific Corporation (NYSE:UNP) is a US-based railroad company. The one-month return of Union Pacific Corporation (NYSE:UNP) was -7.59%, and its shares lost 5.96% of their value over the last 52 weeks. On October 30, 2025, Union Pacific Corporation (NYSE:UNP) stock closed at $218.83 per share, with a market capitalization of $129.801 billion.

Bretton Fund stated the following regarding Union Pacific Corporation (NYSE:UNP) in its third quarter 2025 investor letter:

“After purchasing Union Pacific Corporation (NYSE:UNP) almost 15 years ago and holding shares since the fund’s inception, we sold out of our position, collecting a 13% annualized internal rate of return along the way. For the most part, our investment thesis on Union Paci c played out: they had excellent pricing power from being in a mature duopoly, the decline in coal volume was offset by taking volume away from trucking, and they were able to increase margins through operational improvements.

Growth slowed in recent years as inflation bit into margins and pricing gains slowed, but the fundamentals are still there for an attractive long-term business. We sold because of their pending acquisition of Norfolk Southern, which would create a railroad that spans the continental US. The operational rationale is compelling: creating a coast-to-coast railroad would enable them to ship freight in a straight shot across the country without having to stop and interchange cars somewhere in the middle. But we felt the heady deal price was too dilutive to shareholders, and the long, drawn-out—and inevitably uncertain—regulatory approval process would be a major distraction from the core business, which could use management’s focus at the moment.”

In another article, we covered Union Pacific Corporation (NYSE:UNP) and shared the list of best dividend stocks for the best retirement portfolio. Oakmark Fund initiated a position in Union Pacific Corporation (NYSE:UNP) during the third quarter of 2025. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.