One day after my colleague Sheldon Liber wrote an interesting posts about railroad stocks, Bloomberg News reported that Warren Buffett's Berkshire Hathaway Inc. (NYSE:BRK.A) had become the largest shareholder of Burlington Northern Santa Fe Corp. (NYSE: BNI)

Coincidence? I think not.

Liber wrote that Burlington Northern along with CSX Corp. (NYSE:CSX) and Norfolk Southern Corp. (NYSE:NSC) were worth watching. He even noted that, "If you read any commentary from Warren Buffett you will learn that he looks for strong cash flow as a sign of success and resists investing in companies with a lot of debt."

It has about $6.7 billion in long-term debt. Free cash flow after dividends was $712 million in 2006. The railroad reports earnings April 24. Analysts are expecting earnings of $1.09 on revenue of $3.67 billion, according to Thomson Financial. The mean target price for the stock, which closed Thursday at $82.92, is $88.54.

Shares of Burlington Northern are bound to jump when the market reopens Monday when investors try to go all board.

Sorry, I couldn't resist one bad railroad pun.

Warren Buffett hits the rails originally appeared on BloggingStocks on Sun, 08 Apr 2007 17:10:00 EST. Please see our terms for use of feeds.