Two directors at Norfolk Southern (NSC), Sameh Fahmy and Richard Anderson, both bought 1,000 shares. Both paid just over $255,000 to make their buys, which increased their stakes by 11% and 33%, respectively.
Fahmy was the last director to buy with another 1,000 share pickup in early August, at a lower price of $244,000. Otherwise, there have been two insider sales this year, one of which came from a former CEO. Multiple directors have been buyers going back into the spring.
Overall, Norfolk Southern insiders own 0.1% of shares.
The railroad’s shares have risen by 37% over the past year, slightly underperforming the overall stock market.
Despite concerns about a slowing economy and fewer physical goods getting shipped, revenues are up 3% and improving back-end operations have allowed earnings to soar by 130%.
Norfolk shares remain inexpensive at about 18 times forward earnings.
Action to take: Railroads operate as part of an oligopoly, and have a regional monopoly. That tends to keep profits relatively consistent over time, and can make for a reasonable long-term holding. Investors may like to build a position here, and use pullbacks to add to it.
Norfolk Southern currently pays a 2.1% dividend.
For traders, the January 2025 $270 calls, last trading for about $4.90, could deliver mid-double-digit returns from a continued rally in shares through the end of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.