July 15, 2012
The following video is part of our "Motley Fool Conversations" series, in which Isaac Pino discusses topics around the investing world.
Today, Isaac discusses two railroads that he believes are differentiating themselves from the other carriers. Isaac recently contributed to a New York Times article about railroad Union Pacific, which discussed the railroad's newest and biggest ad campaign. What's intriguing about the print and media campaign is Union Pacific's blatant attempt to portray the company as a symbol of American industry. Isaac believes the ads parallel those that General Electric ran during the Super Bowl that portrayed GE as a company that generated the power for Budweiser's brewing plant, and thus embodied that spirit of American ingenuity.
The campaigns bring attention to industries that consumers are less aware of currently but could become acquainted with in the near future. Expect GE to start making moves in consumer-facing fields like digital technology that controls the way you manage your home's energy, electric-vehicle charging stations, and increasingly high-tech health-care appliances that will benefit developing countries. For Union Pacific and CSX, the two railroads that launched substantial ad campaigns, expect them to pivot away from an age-old industry and brand themselves as logistics companies similar to UPS and FedEx. Isaac thinks both railroads are attempting to emphasize innovation in an industry that many customers might believe has stagnated.
Warren Buffett brought attention to the railroad sector when he purchased Burlington Northern Santa Fe not too long ago, and recently Buffett's expressed enthusiasm about another undervalued industry. We've highlighted the companies Buffett would like to purchase in our recent free report: "The Stocks Only the Smartest Investors Are Buying." We invite you to download a free copy. To find out the name of the bank Buffett would probably be interested in if he could still invest in small banks, just click here.