Railroad stocks did not have a great 2015. Indeed, several big railroad names have lost more than a fourth of their share value over the last year. Many speculate that railroads have hit a bottom in terms of cargo volume, and that improved economic conditions could see the railroad sector pick up steam once again. If rising commodity prices, a weakening dollar, and other factors have you feeling bullish about the state of the economy, then you’ll want to pay attention to the railroad space. Right now, companies from this industry are trading at a bargain relative to their share price a year ago. Below are three railroad corporations that are pretty cheap across some important valuation metrics, so they may see more price appreciation than their fellow peers if the earnings outlook for the industry grows. Canadian Pacific Railway-CP Canadian Pacific Railway connects the Atlantic and Pacific coasts with its railway service. The company operates in Canada and the United States with the 14,000 miles of track that it owns. CP is a Zacks Rank #2 (Buy) and has a $20.62 billion market cap. Canadian Pacific has some attractive valuation metrics going for it. The company trades at a forward PE of 16.23. This may not be very attractive at a glance, but when you see that the company trades at a PEG of 1.15, it’s clear to see why Canadian Pacific is pretty cheap compared to its peers. The railway segment as a whole trades at a PEG of 1.74, which is pretty high compared to CP’s. Canadian Pacific is pretty liquid in the short term, as it has a current ratio of 1.06. CP is pretty profitable too, with a net margin of about 20%. Canadian’s shares have lost 25.69% of their value over the last 52 weeks. Since February, however, shares are 16.17% higher. Genesee & Wyoming Inc-GWR Genesee & Wyoming owns and operates short line and regional freight railroads. The company has three segments, which are North American Railroad Operations, Australian Railroad Operations, and Industrial Switching. GWR is a Zacks Rank #3 (Hold), and the stock has a beta of 1.65. Genesee looks like a bargain across some important valuation metrics. The company trades at a price-to-book of 1.33, while the industry as a whole trades at a price-to-book of 2.06. Genesee has an EV/EBITDA of 9.94 and it also trades at a forward PE of 15.69. GWR has a price-to-sales (P/S) of 1.67, and the industry’s average P/S lags behind at 2.13. Genesee has a debt/equity of 0.88. Over the last year, shares of GWR have lost 37.74% of their value. Year-to-date, the stock has climbed 11.27% higher. Norfolk Southern Corporation-NSC Norfolk Sothern Corporation owns two major freight railroads, Norfolk Southern Railway Company and Norfolk Western Railway Company. The corporation operates across numerous states as well as the Province of Ontario. Today, Canadian Pacific Railway withdrew its offer to acquire NSC. The two companies couldn’t see eye to eye strategically, and NSC has questioned the value behind Canadian Pacific’s offer. The deal fell apart, but that doesn’t change the fact that NSC stock appears to be trading at a discount right now. Norfolk Southern Corporation is a Zacks Rank #3 (Hold), and it doles out a 2.9% dividend. NSC has an EV/EBITDA of 7.91, while the industry has an average EV/EBITDA of 9.94. The company trades at a forward PE of 14.84, and its PEG is 1.32. Norfolk is ahead of the industry across these two valuation metrics. Norfolk trades at a price-to-book of 1.96, which is slightly lower than the industry average. In the last 52 weeks, Norfolk has lost about 25% of its share value. Since February though, the company’s share value has appreciated by 11.84%. The withdrawal of Canadian Pacific’s offer is weighing down NSC shares today, but Norfolk believes that it can perform well on its own. Bottom Line Many people don’t know which way to go when it comes to investing in railroad stocks. It’s definitely a bold investment move to make right now, and analysts predict that there could be volatile times ahead for stocks in the railway space. CSX Corporation CSX will report its quarterly earnings tomorrow after the close on Tuesday. Pay attention to its earnings release, as it will help you to gauge what could happen to railroad companies this earnings season. The Zacks Rank is a truly marvelous trading tool. Our ranking system has beaten the S&P 500, yielding an average return of 25% per year for the last 29 years! Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CSX CORP (CSX): Free Stock Analysis Report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report GENESEE & WYO (GWR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research