Dear International Living Reader,

The Bernese Oberland is the mountainous area in the canton of Berne that encompasses some of Switzerland’s most prestigious resorts, notably Adelboden, Grindelwald, Gstaad, and Wengen. In a moment, I’ll explain an investment opportunity in this region that I think is worth a look. First, I can’t resist painting you an image of this beautiful area, part of my homeland…

The Bernese Oberland is a lake region with stunning mountains. It includes the large and chic Interlaken resort, which marks the departure toward the summits of these majestic–and at times mystic–mountains.

The Eiger North Face is the most famous of them, and to this day even experienced mountaineers shudder when they think of climbing the near-vertical 6,561-foot rock passage. Thousands have conquered this mountain…but there have been more deaths here than on any other.

Interlaken may be a mere village in terms of population, but when wandering down the streets of this picturesque resort town you’ll overhear conversations not only in German, English, and French, but also in Mandarin, Hindi, Malaysian, and Arabic. The place has a distinct cosmopolitan feel.

Tourists enjoy taking a trip in the green-yellow trains of the Wengernalpbahn, a local railway company. The ride (climbing 6,762 feet) is among the most scenic train journeys anywhere in the world. It’s a good chance to sit back and enjoy the results of Swiss engineering ingenuity; building these mountainside trains bordered on a miracle when they were first put into operation in the late 19th century.

The Wengernalpbahn belongs to Jungfraubahn Holding (JFN.Zurich), a listed holding company for railway companies. Nearly every single local railway of the tourist region belongs to Jungfraubahn–the firm now has a quasi-monopoly after gobbling up smaller local competitors.

The railway station at the top of the Jungfraujoch, at a height of 11,332 feet above sea level, is quite suitably called the "Top of Europe." It’s easy to see why millions of tourists flock to the region to take in the outstanding natural beauty of the place…and most of them end up paying some money into the pockets of Jungfraubahn or its subsidiaries. (Follow this link to take a look at the gallery of photos shot from the crown jewel of the firm’s railway possessions.)

Since early 2004, the share price of Jungfraubahn has been climbing almost as steeply as the Eiger North Face. Prices for the train tickets, too, are steep. Just the journey from Kleine Scheidegg at 6,762 feet to the Jungfraujoch at 11,332 feet will set you back CHF104 (Swiss Francs)–that’s nearly $85.

Most of the railway equipment has long been written off, and investments to keep the trains and tracks in pristine condition are quickly amortized. The company has a vast cash flow surplus. And because of the constant cash flow, it also owns plenty of real estate, often in the best locations of the region.

Following the recent strong rise in share price, it likely will now consolidate. After several acquisitions in recent years, Jungfraubahn needs to digest the integration and modernization costs. But it remains one to watch, particularly if the share price comes back (i.e. during a weak market phase).

Beat Erni
for International Living

P.S. Sven Lorenz invited me to join his Profit Hunter team because of my connections with the "gnomes" of Zurich. I’m constantly following the tracks of the world’s wealthy to come up with interesting, and often unique, investment plays. To receive more from Sven, myself, and the other members of our Profit Hunter team (including details on Sven’s play on the coming Russian consumer boom), read on…