Thanks to a certain Omaha resident, railroad stocks are suddenly in vogue. I thought I'd mention an interesting development at one of Canada's largest rail companies.
We've tended to keep Canadian Pacific
Yesterday, the company announced a multi-year initiative to secure land and build out its rail network to the Industrial Heartland area outside Edmonton, Alberta. This is the planned site of huge oil sands-related infrastructure development getting under way over the next few years. Total SA
Canadian Pacific benefits from the oil sands activity in two ways. First, it can meet a critical need in transporting raw materials during the construction phase. Then, once bitumen upgrading gets under way, there will be a new market for the byproducts.
Railroads don't casually build out their networks -- not since the 1890s, anyway. If the price tag on a bitumen upgrader wasn't enough to convince you that the oil sands are a meaningful, long-term phenomenon and not just an energy sideshow, maybe this development will grab your attention. Sure, there are speculative plays like Oilsands Quest
Fool contributor Toby Shute hasn't hitched his portfolio to any company mentioned. Total SA is a Motley Fool Income Investor recommendation. The Motley Fool's disclosure policy doesn't require an upgrade.