Mr. Seidl: The rail stocks have recovered off their lows of 2009, but they're still not back to the levels seen in 2008. I think there are a couple of reasons for that. The group is more of an early cycle play and investors have rushed to move money into sectors that historically have been leading indicators for a recovery. The fact that they have not moved as much as their trucking counterparts is likely due to their exposure to different end markets and pending regulation coming from Capitol Hill.
TWST: What's the pressure in terms of possible new regulation?
Mr. Seidl: There are several bills out there on Capitol Hill that are looking to
exert more regulatory control of the rail industry, whether you're looking at it
from an antitrust standpoint or you're looking at it from a captive shipper
standpoint.
Tickers included in this excerpt: BNI, CSX, GWR, UNP
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