Railroad companies Kansas City Southern KSU 0.37% and Union Pacific Corporation UNP 0.7% could have a lot on the line if Donald Trump follows through on his protectionist campaign promises. While most analysts have focused on Kansas City Southern due to its exposure to Mexico, Loop Capital analyst Rick Paterson says Mexico is critical to Union Pacific’s growth story as well.

Rails’ Exposure To Mexico And NAFTA Possibilities

“Between 2010–2015, Mexico volumes compounded at 5 percent versus 2 percent for the rest of the business, excluding coal,” Paterson explained.

On the campaign trail and at the debates, Trump repeatedly criticized NAFTA, an agreement that facilitates trade between the United States and Mexico. If the United States chooses to exit NAFTA, U.S. trade tariffs could stay at zero, revert back to pre-NAFTA levels or be re-set to new levels by Congress. The United States must notify Mexico and Canada six months prior to exiting NAFTA.

Post-Election Reactions

Following Trump’s election, Kansas City Southern released…

Click here to continue reading

Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!