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Sept. 18, 2017, 11:09 a.m. EDT

One of Warren Buffett’s favorite industries is about to get hot again : MKM

Railroads poised for big moves, says technician. Autos, too.

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By Barbara Kollmeyer, MarketWatch


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It’s time to ride the rails. And maybe hop in a fast car while you’re at it.

That’s the latest advice from MKM Partner’s chief market technician Jonathan Krinsky, who says these industrial sectors are about to bust higher, taking related shares along for the ride.

Billionaire investor Warren Buffett is one of the biggest railroad fans, so much so that he bought Burlington Northern Santa Fe several years ago. But then he also let go of Norfolk Southern /zigman2/quotes/200877725/composite NSC -1.31%  and Union Pacific /zigman2/quotes/209717171/composite UNP -0.92% .

Norfolk Southern and Union Pacific are among the railroads recommended by Krinsky, who says pick trains over planes when it comes to industrials, which he believes are “poised to break out of a multi-month trading range.” That breakout suggests about 3% upside for the sector, he said, using the Dow Jones U.S. Railroads Index /zigman2/quotes/210598912/realtime XX:DGUSRAIA -1.05%  as a guide here:


MKM Partners LLC

The two other rail stocks Krinsky likes are CSX Corp. /zigman2/quotes/208536759/composite CSX -1.11% and Kansas City Southern /zigman2/quotes/200211518/composite KSU -0.99%  

More generally in the industrials sector, Krinsky suggests investors pick up Emerson Electric Co. /zigman2/quotes/200181610/composite EMR +0.10% , Paccar Inc. /zigman2/quotes/207923670/composite PCAR -0.24% , Roper Technologies Inc. /zigman2/quotes/204270015/composite ROP +0.84% and Textron Inc. /zigman2/quotes/210490092/composite TXT -0.57% .

And it isn’t just trains. Krinsky also sees a breakout coming for global autos, noting that the Nasdaq OMX Global Auto Index  hit the highest level in more than two years last week:


MKM Partners

Within that sector, he has BMW AG /zigman2/quotes/209548467/delayed DE:BMW -2.05% , General Motors Co. /zigman2/quotes/205226835/composite GM -1.81% , Tesla Inc. /zigman2/quotes/203558040/composite TSLA +0.18% Toyota Motor Corp.  /zigman2/quotes/203803129/delayed JP:7203 +1.10% , Mitsubishi Motors Corp. /zigman2/quotes/202404490/delayed JP:7211 -0.25% , Michelin  /zigman2/quotes/203570581/delayed FR:ML -0.72% and Peugeot SA /zigman2/quotes/203546414/delayed FR:UG -1.52%  on his list of buy ideas.

 

/zigman2/quotes/200877725/composite
US : U.S.: NYSE
$ 208.05
-2.76 -1.31%
Volume: 1.36M
Feb. 21, 2020 6:30p
P/E Ratio
20.31
Dividend Yield
1.77%
Market Cap
$54.36 billion
Rev. per Employee
N/A
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/zigman2/quotes/209717171/composite
US : U.S.: NYSE
$ 181.72
-1.68 -0.92%
Volume: 2.89M
Feb. 21, 2020 6:30p
P/E Ratio
21.67
Dividend Yield
2.14%
Market Cap
$126.59 billion
Rev. per Employee
$544,047
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XX : Dow Jones Global
2,592.18
-27.47 -1.05%
Volume: 8.71M
Feb. 21, 2020 6:05p
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/zigman2/quotes/208536759/composite
US : U.S.: Nasdaq
$ 79.56
-0.89 -1.11%
Volume: 3.85M
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19.08
Dividend Yield
1.31%
Market Cap
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Rev. per Employee
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/zigman2/quotes/200211518/composite
US : U.S.: NYSE
$ 174.23
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Volume: 598,837
Feb. 21, 2020 6:30p
P/E Ratio
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Dividend Yield
0.92%
Market Cap
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Rev. per Employee
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US : U.S.: NYSE
$ 72.09
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20.59
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2.77%
Market Cap
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Rev. per Employee
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US : U.S.: Nasdaq
$ 75.36
-0.18 -0.24%
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P/E Ratio
10.97
Dividend Yield
1.70%
Market Cap
$26.10 billion
Rev. per Employee
$839,325
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/zigman2/quotes/204270015/composite
US : U.S.: NYSE
$ 387.25
+3.24 +0.84%
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P/E Ratio
23.02
Dividend Yield
0.53%
Market Cap
$39.96 billion
Rev. per Employee
$332,535
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/zigman2/quotes/210490092/composite
US : U.S.: NYSE
$ 47.36
-0.27 -0.57%
Volume: 1.01M
Feb. 21, 2020 6:30p
P/E Ratio
13.52
Dividend Yield
0.17%
Market Cap
$10.87 billion
Rev. per Employee
$399,200
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/zigman2/quotes/209548467/delayed
DE : Germany: Frankfurt
64.37
-1.35 -2.05%
Volume: 2,543
Feb. 21, 2020 8:58p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€723,779
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/zigman2/quotes/205226835/composite
US : U.S.: NYSE
$ 34.65
-0.64 -1.81%
Volume: 8.43M
Feb. 21, 2020 6:30p
P/E Ratio
7.58
Dividend Yield
4.39%
Market Cap
$50.43 billion
Rev. per Employee
$849,994
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/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 901.00
+1.59 +0.18%
Volume: 14.34M
Feb. 21, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$165.84 billion
Rev. per Employee
$439,627
loading...
/zigman2/quotes/203803129/delayed
JP : Japan: Tokyo
¥ 7,837.00
+85.00 +1.10%
Volume: 5.15M
Feb. 21, 2020 3:00p
P/E Ratio
9.06
Dividend Yield
2.81%
Market Cap
¥21916.10 billion
Rev. per Employee
¥81.43M
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/zigman2/quotes/202404490/delayed
JP : Japan: Tokyo
¥ 404.00
-1.00 -0.25%
Volume: 5.70M
Feb. 21, 2020 3:00p
P/E Ratio
11.59
Dividend Yield
4.95%
Market Cap
¥602.77 billion
Rev. per Employee
¥80.91M
loading...
/zigman2/quotes/203570581/delayed
FR : France: Euronext Paris
109.55
-0.80 -0.72%
Volume: 549,099
Feb. 21, 2020 5:36p
P/E Ratio
11.34
Dividend Yield
3.51%
Market Cap
€19.71 billion
Rev. per Employee
€198,272
loading...
/zigman2/quotes/203546414/delayed
FR : France: Euronext Paris
19.14
-0.30 -1.52%
Volume: 3.38M
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P/E Ratio
5.66
Dividend Yield
4.08%
Market Cap
€17.39 billion
Rev. per Employee
N/A
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Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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