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Warren Buffett Boosts Stake in Rail Company

Warren Buffett's company has bought 10.1 million shares of Burlington Northern Santa Fe since Thursday, increasing the legendary investor's stake in the nation's No. 2 railroad to nearly 14.8%.

Warren Buffett
AP
Warren Buffett

Berkshire Hathaway revealed its three latest railroad stock purchases in documents filed with the Securities and Exchange Commission late Monday.

Both classes of Berkshire's stock fell less than 1% Friday before the filing was released. Berkshire Class A shares, which are the most expensive U.S. stock, lost $850 to close at $119,000. Berkshire Class B shares lost $29.50 to close at $3,965.50.

The Omaha-based company bought more than 4.3 million shares for $79.96 apiece on Thursday and nearly 2.5 million shares for $79.97 on Friday. On Monday, the company bought more than 3.3 million shares for $80 apiece.

It's the third set of BNSF purchases Berkshire has reported this month, with the first two sets totaling about 2.5 million shares.

That brings Berskhire's total stake in the Fort Worth, Texas-based railroad to 52.1 million shares. The new shares were bought by Berkshire subsidiary National Indemnity Company.

Berkshire said National Indemnity now holds 26.1 million shares, Columbia Insurance Company holds 24.7 million shares and National Fire & Marine Insurance Company holds 1.3 million shares.

Appealing Investment

Because the purchases are by subsidiaries, it's not clear whether Buffett himself made the decision to buy. Berkshire officials do not typically comment on the company's stock holdings. A message left for spokeswoman Jackie Wilson after business hours Friday wasn't immediately returned.

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

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

But Berkshire omitted those investments from a quarterly summary of its stock holdings filed earlier this week 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.

Burlington Northern's gained $1.67 in after-hours trading after finishing at $80.33 Monday.

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 and Wells Fargo.