Union Pacific's Train Is Literally Leaving the Station

If you held on to your Union Pacific Corporation

shares, first discussed here on March 27, 2009 at a price of $43, during its summer doldrums, you're being rewarded, as the shares have powered ahead, taking out $80 and $90 resistance. In fact, if you bought at/near the $48.62 price, now may be a good time to consider taking some profits off the table with UNP. However, those investors who can tolerate the risk can retain their full position and go for a possible greater gain. I'd also raise the sell/stop loss to $76 from $43. Almost all of the macro-factors are lining up for UNP. Union's revenue will likely increase an impressive 15-20% in 2010, with a better than 7% volume increase, on rising intermodal, industrial, and chemical transportation demand; 2011 revenue should advance 11-13%. Further, the calculation here remains that the railroad rebound has only just begun, due to U.S./global economic recoveries. The more economically-sensitive, cyclical freight business is just starting to gain steam, and the increased demand should support UNP's pricing power, in addition to volumes. A modest $1.32 annual dividend complements the growth story.

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