Should You Buy Railroads Following The President's Push For Infrastucture

During his State of the Union Address last night, President Obama stressed that he will be pushing for continued infrastructure expansion. This is to include transportation as well as technology. This could be good news for companies in the railroad and transportation sector. The President is looking to create a high-speed transportation system comparable to that in China. This new system will most likely run on a new line separate from the current railways. This will create jobs and drive private sector growth through government spending. This will bode well for railroad companies like CSX CSX and Norfolk Southern NSC, as these stocks have begun to see increases lately. “We will put more Americans to work repairing crumbling roads and bridges,” Obama said. “We will make sure this is fully paid for, attract private investment and pick projects based on what's best for the economy, not politicians.” This statement comes again after his pledge during his initial campaign to increase infrastructure spending. Aside from the railroads, this will bode well for Caterpillar CAT and Texas Industries TXI, who make construction machinery and concrete & cement, respectively. According to a recent Bloomberg report, the President is set to unveil a six-year transportation plan that will include creating an infrastructure bank for the projects. CSX is trading higher at $70.45 NSC is trading lower at $62.16 CAT is trading higher at $94.72