What Makes Union Pacific (UNP) an Investment Bet?

Oakmark Funds, advised by Harris Associates, released its “Oakmark Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund underperformed its benchmark, the S&P 500 Index, but outperformed the benchmark since inception. The largest contributors to performance were financials and energy, at the sector level, while health care and consumer staples detracted. 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, Oakmark 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 7.74%, and its shares lost 4.44% of their value over the last 52 weeks. On October 9, 2025, Union Pacific Corporation (NYSE:UNP) stock closed at $231.54 per share, with a market capitalization of $137.332 billion.

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

“Union Pacific Corporation (NYSE:UNP) is the largest and most profitable Class I railroad in the U.S. We see freight rail as an attractive industry, underpinned by irreplaceable infrastructure, strong pricing power, and minimal risk of technological disruption. The company is led by an exceptional CEO, Jim Vena, who has driven significant cultural and operational improvements. Despite these improvements, the stock has significantly underperformed the market in recent years as macro headwinds and uncertainty related to the proposed merger with Norfolk Southern have distracted investors from an improving long-term outlook. This provided us with the opportunity to purchase UNP at a meaningful discount to our estimate of intrinsic value. We believe the stock is undervalued on a standalone basis, with further potential upside should the merger be approved, as we find the strategic and financial logic of the deal compelling.”

Dividend Paying Stocks in Railroads: The Case for Union Pacific Corporation (UNP)

Union Pacific Corporation (NYSE:UNP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 89 hedge fund portfolios held Union Pacific Corporation (NYSE:UNP) at the end of the second quarter, up from 85 in the previous quarter.  While we acknowledge the risk and potential of Union Pacific Corporation (NYSE:UNP) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Union Pacific Corporation (NYSE:UNP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Union Pacific Corporation (NYSE:UNP) and shared ClearBridge Large Cap Growth Strategy’s views on the company. 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.