SCCM Enhanced Equity Portfolio Exited Norfolk Southern (NSC) Following Acquisition Announcement

Cullen Capital Management, LLC, operating under the name Schafer Cullen Capital Management, Inc. (SCCM), has released its “SCCM Enhanced Equity Income Fund” fourth-quarter investor letter. A copy of the letter can be downloaded here. In the fourth quarter, the US equity market continued to rally, largely fueled by enthusiasm for artificial intelligence. The Enhanced Equity Income Strategy returned 2.0% (net) for the fourth quarter and 7.5% (net) for the year, compared to 6.5% and 8.9% from its primary benchmark, the S&P 500 Buy/Write Index, and 1.4% and 8.7% for its secondary benchmark, the SPDR Barclays High Yield Bond ETF (JNK), respectively.  The Strategy's total return was significantly affected by investors' disregard for high-dividend and low-volatility factors, as well as an equity market that failed to expand across sectors. The Strategy anticipates a positive economic outlook for 2026, driven by the Federal Reserve's interest-rate cuts, tax reductions, capital-expenditure bonus depreciation (OBBBA), and potential lower tariffs, all contributing to growth. In addition, please check the Strategy’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, SCCM Enhanced Equity Income Fund highlighted stocks like Norfolk Southern Corporation (NYSE:NSC). Norfolk Southern Corporation (NYSE:NSC) is a transportation company that specializes in rail transportation of raw materials, intermediate products, and finished goods. On February 27, 2026, Norfolk Southern Corporation (NYSE:NSC) stock closed at $314.74 per share. One-month return of Norfolk Southern Corporation (NYSE:NSC) was 7.97%, and its shares gained 28.39% over the past 52 weeks. Norfolk Southern Corporation (NYSE:NSC) has a market capitalization of $70.682 billion.

SCCM Enhanced Equity Income Fund stated the following regarding Norfolk Southern Corporation (NYSE:NSC) in its fourth quarter 2025 investor letter:

"Norfolk Southern Corporation (NYSE:NSC) was sold in the quarter. Shares of Norfolk Southern were purchased in the strategy in May of 2025 and therefore held for well less than a year. However, in July, Union Pacific announced its acquisition of Norfolk Southern and the deal is expected to close by early 2027. Shares of Norfolk Southern have appreciated significantly since our purchase date, aided by the bid from Union Pacific but also driven by strong Merchandise revenue as well as an improving operating ratio. At 22x earnings and a dividend yield now under 2%, we decided to sell the shares and buy shares of Union Pacific, which trades at a lower P/E and higher dividend yield."

Norfolk Southern Corporation (NYSE:NSC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 80 hedge fund portfolios held Norfolk Southern Corporation (NYSE:NSC) at the end of the fourth quarter, compared to 81 in the previous quarter. While we acknowledge the potential of Norfolk Southern Corporation (NYSE:NSC) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Norfolk Southern Corporation (NYSE:NSC) and shared The London Company Large Cap Strategy's views on the company. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.