Kansas City Southern (KSU) Chugs In The Right Direction; Barron’s

Railroad stocks generated interest when investment guru Warren Buffet chased Burlington Northern (NYSE: BNI) last fall. According to Barron’s, the best bet in the sector, however, seems to be the relatively smaller Kansas City Southern (NYSE: KSU). The first quarter is indicative of railroad companies’ prospects for the rest of the year, and results have been very good so far.

Kansas looks likely to fare better than its rivals since it operates on a north-south axis as opposed to the more popular east-west route. The exposure to Mexico which was a liability in the recession could be the differentiator now as manufacturing activity picks up in the region. Kansas shows better growth prospects and analysts expect nearly $1.80 per share in 2010.