Buffett's Berkshire buys more railroad shares

By
USA Today
September 6, 2007, 2:16 PM ET
2 min read

OMAHA -- Warren Buffett's investment company has bought more railroad stocks this month, reporting a purchase of 845,000 shares of Burlington Northern Santa Fe bni in a filing with the Securities and Exchange Commission late Thursday.

The purchase raised the legendary investor's stake in the railroad to 15%, just short of 53 million shares.

Both classes of stock in Berkshire Hathaway brka/brkb fell less than one-half percent Thursday before the filing was released. Berkshire Class A shares, which are the most expensive U.S. stock, lost $240 to close at $118,510. Berkshire Class B shares lost $1.75 to close at $3,948.25.

It was unclear whether Buffett himself or one of his more than 60 subsidiary companies made the decision to buy. A Berkshire spokeswoman said Friday morning that the company would make no comment.

Berkshire paid $67.5 million for the shares on Tuesday at $79.85 apiece. The price was 11 cents a share less than the price a Berkshire subsidiary paid for 4.3 million shares last Thursday and 12 cents a share less than the 2.5 million shares it bought last Friday. Last Monday, the company bought more than 3.3 million shares for $80 apiece.

The shares acquired last week were bought by Berkshire subsidiary National Indemnity.

Buffett has said in the past that railroads have become an appealing investment because they have a better competitive position today than in past years. Buffett said he was slow to realize that railroads were a good investment because he was prejudiced by the industry's past performance.

A May SEC filing revealed Berkshire owned 10.5 million shares of Union Pacific unp and nearly 6.4 million shares of Norfolk Southern nsc.

Berkshire omitted those investments from a quarterly summary of its stock holdings filed earlier this month because the SEC allowed the company to keep them confidential, so it's not clear how much Union Pacific and Norfolk Southern stock Berkshire currently owns.

Berkshire owns furniture, insurance, jewelry and candy companies, restaurants, natural gas and corporate jet firms and has major investments in such companies as Coca-Cola ko and Wells Fargo wfc.