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Union Pacific Corporation Message Board

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  • railhawk22 railhawk22 Mar 27, 2007 2:07 PM Flag

    Cramer: UNP biggest landowner in the Nation

    I thought most of the land went with the spin-off of Union Pacific Resources 10 - 15 years ago. They were eventually taken over by Anadarko. What land is left?

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    • Union Pacific Resources was an oil company that they owned. It had nothing to do with all the land they own. It seems there are a lot of posts lately trying to dispute that UP has a lot of valuable land. Besides Cramer pointing out that they are the biggest land owner in the US, UP's 10Q shows they have over $35 billion in road properties. This $35 billion value is a very conservative figure from what the true value is. Obviously they don't want to pay any more taxes than they have to. Not even counting buildings and vacant land, I know of many large yards in major cities that is prime real estate, that could be sold and new yards built on the out skirts of town.
      I am not advocating that an LBO be done. I am just concurring with Cramer that it is a distinct possibility that a private equity firm would be interested in unlocking the true value of the company. To ignore this possibility, whether you are long or short, would not be wise. If a LBO happens at one of the major railroads, all the the railroad stocks will go up.
      All the transports sold off today on fears of the economy slowing some more. UP has already stated that they will make earnings this quarter, and expects a better second half for the company. That is why I am still bullish on the stock.

      • 2 Replies to richarda97
      • richarda97-

        The Rock Island (and successors) closed a lot of small depots and tore up a lot of track in the midwest due to land tax pressure which was the last straw. Now that land is producing nothing, including no tax.

        Some of those branch lines could have done well today and served those communities with the resurgence of agriculture due to ethanol, etc.

        -DM

 
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