Buying a railroad company

[swcejk2002]

Hello forum. I represent a new investment group. One of our clients is interested in purchasing a railroad company. Any size would be viewed but specifically a short line to get 'things rolling' (no pun intended).....I have not had any luck finding resource that may list such opportunities....hope for some help here...Thanks

[mtuandrew]

Welcome!

Unless you plan to make millionaires the hard way - by starting with billionaires - railroads are a very difficult investment. Only the largest and a very few others have succeeded in returning their investment sufficiently well to be recommended. Those that have, are usually diversified in traffic sources as well as other ventures (see Kansas City Southern Industries.)

I'm not sure which forum this is best suited for, but I'll refer this to Jeff Smith and see if he has a better place. After all, this doesn't have anything specifically to do with passenger rail.

[mtuandrew]

Moderator's Note: Thread moved to General Discussion: Short Lines, Industrials, and Military.

[Jeff Smith]

I think there must be a short-line railroad association out there somewhere. I'm pretty sure I've seen it. There are also short-line tax credits; not sure if they've been renewed this year. Although they are in some ways the "competition", I'd subscribe to Progressive Railroading Magazine.

From my observations, it seems there are not too many independents. There are a few holding companies out there: Rail America, Genesee and Wyoming, and so on. And, although it's not a Class III Railroad, FEC is held by a takeover specialist. You could also look at some of the Class II's such as Providence and Worcester.

And, you could make quite a few of us in the Northeast happy and buy Housatonic Railroad company.

Please keep us informed (of course, without violating any SEC or insider laws).