Kansas City Southern (KSU): This Sector Is Booming and Nobody Seems to Have Noticed

This is after the company has already retired 129 million shares at a total cost of almost $8 billion since 2006. The amount of cash flow the company has produced and is expected to produce is very evident from the these share-buyback plans.

Delivering a mixed load

The railroad sector is definitely worth a look now even though some of the bigger players are overpriced. Norfolk Southern Corp. (NYSE:NSC) and Canadian National demonstrate that there are still bargains on the rails.

The performance of Union Pacific Corporation (NYSE:UNP) and Kansas City Southern (NYSE:KSU) shows us that there’s still a lot of room for growth in the rail sector. Even though they’re among the oldest of blue chips, railroads have to be regarded as growth stocks right now.

Definitely consider adding a railroad to your portfolio at this point, but be careful. Some of the major railways are now overvalued and may not deliver the same performance next year.

Nauman Aly has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article This Sector Is Booming and Nobody Seems to Have Noticed originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.