Cullen Capital Management, LLC, operating under the name Schafer Cullen Capital Management, Inc. (SCCM), has released its “SCCM Enhanced Equity Income Fund” second-quarter investor letter. A copy of the letter can be downloaded here. US equities surged in the second quarter, with the S&P 500 gaining 10.9% while the Russell 1000 Value was up 3.8%. The composite underperformed both of its benchmarks in the second quarter, returning -1.2% (net) compared to a 1.9% return by the S&P 500 Buy-Write Index (BXM) and a 3.7% return by the SPDR Bloomberg High Yield Bond ETF (JNK). In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its second-quarter 2025 investor letter, SCCM Enhanced Equity Income Fund highlighted stocks such as Norfolk Southern Corporation (NYSE:NSC). Norfolk Southern Corporation (NYSE:NSC) engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States. The one-month return of Norfolk Southern Corporation (NYSE:NSC) was 1.87%, and its shares gained 9.30% of their value over the last 52 weeks. On August 29, 2025, Norfolk Southern Corporation (NYSE:NSC) stock closed at $279.98 per share, with a market capitalization of $62.815 billion.
SCCM Enhanced Equity Income Fund stated the following regarding Norfolk Southern Corporation (NYSE:NSC) in its second quarter 2025 investor letter:
“Norfolk Southern Corporation (NYSE:NSC) – Shares of NSC were purchased in the strategy. With origins dating to 1827, NSC owns and operates a rail network spanning 19,200 route miles and 22 states. From late 2022 through early 2025, the transports industry experienced a freight downturn with a consistent decline in shipment volumes due to destocking and a drop in consumer demand from the pandemic highs. Rail intermodal was hit particularly hard, with 2024 industrywide intermodal volumes down roughly 10% from 2022. However, volumes have begun to recover in 2025, with weekly rail traffic up mid-single digits from a year ago. While concerns remain surrounding the impact of tariffs and global trade fluctuations, NSC should be resilient given its strong presence in the Eastern US connecting 60% of the country’s consumer base and manufacturing base. Importantly, NSC’s operating ratio (OR), a primary measure of rail efficiency, significantly lags that of major peers, with adjusted OR’s in mid- to high 60s versus peers in the low 60s or high 50s percentiles. Increasing efficiency and lowering the OR is a primary goal of Mark George, who took over as CEO in September 2024. Through the implementation of precision scheduled railroading (PSR), Mr. George and his team believe NSC can achieve a low-60s OR in the medium term and a below 60 OR over the longer term. Shares of NSC were purchased at a P/E of 16.8x with a 2.3% dividend yield.”
