Donald Trump has pledged to resurrect the coal industry. If he follows through on that promise, that’s great news for many railroads, which can generate big sales from transporting coal across the country.
So it shouldn’t be a big surprise that investors are — to quote Ralph Wiggum from “The Simpsons” — choo choo choosing railroad stocks following Trump’s big win.
Union Pacific (UNP), CSX (CSX) and Norfolk Southern (NSC) stocks rallied on Wednesday and rose again Thursday. Each of them get a decent amount of revenue from shipping coal.
But while Wall Street was saying “all aboard!” for most of the sector, one railroad got left at the station. Shares of Kansas City Southern (KSU), which does about half of its business in Mexico, plunged more than 10% Wednesday and was down again Thursday.
If Trump is serious about building a wall on the border, ripping up the NAFTA trade agreement and essentially pretending that it’s 1836 and remembering the Alamo, then Kansas City Southern could suffer.
Canadian railroads Canadian Pacific (CP) and Canadian National Railway (CNI) could also be hurt if Trump ramps up his anti-Mexico rhetoric. Those two stocks also run north-south rail lines. Shares of each fell on Wednesday but rebounded a bit on Thursday.
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