Warren Buffett's (NYSE: BRK.A) decision to buy the 77.4% shares of Burlington Northern Santa Fe (NYSE: BNI) that he did not already own, for $100 each in cash and stock, is like an early holiday present for BNI shareholders.And first recommended on April 30, 2009 at a price of $67.81, that means BNI shareholders will earn a cool 47% for their April-bought shares. Not bad for a six-month investment. I would say BNI probably was worth 10-15% more, but BNI shareholders will take the immediate pay-off, just the same.
Buffett's move also reflects his stance toward U.S. railroads, a sector I like, too.
"Our country's future prosperity depends on its having an efficient and well-maintained rail system," Warren E. Buffett said in a statement. "Conversely, America must grow and prosper for railroads to do well. Berkshire's $34 billion investment in BNSF is a huge bet on that company, CEO Matt Rose and his team, and the railroad industry."
The Bottom Line for investors: The rails, for highway-congestion and climate change reasons, will play a larger roll in container and commodity transport in the United States in the decade ahead.
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