Union Pacific is the leading railroad company in the United States spanning 32K miles. Built up through consolidation, this relic of the Gilded Age is still dominating the market. I am bullish on top-line growth: 16% y-o-y in 2011 and 13% in 2012, according to my model. I also expect the rate of operating expense growth to decline from 11% in 2011 to 9.4% in 2012.
I believe that Union Pacific has a stellar executive management focused on value creation. As the economy picks up, I also expect that railroads will experience tremendous gains--especially those that are prepared to acquire competition.
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