Warren Buffett's company buys 1.4 million more shares of No. 2 US railroad


OMAHA, Nebraska (AP) - Legendary investor Warren Buffett's company bought another 1.4 million shares of Burlington Northern Santa Fe Corp. this week to gain control of nearly 12 percent of the United States' number two railroad.

Berkshire Hathaway Inc. revealed its two latest railroad stock purchases in documents filed with the U.S. Securities and Exchange Commission late Friday.

Both classes of Berkshire's stock gained more than 4 percent Friday to set new 52-week highs. Berkshire Class A shares, which are the most expensive U.S. stock, gained $4,750, or 4.2 percent, to close at $118,500 Friday before the filing was released. Its Class B shares gained $156.50, or 4.1 percent, to close at $3,948.

Amid this week's market turmoil, Berkshire appears to have found some deals. The company bought 900,800 shares for $76.50 apiece on Thursday and 500,700 shares for $78.96 on Wednesday. Earlier this month, Berkshire paid $80.40 for 1.1 million shares of Burlington Northern.

Berkshire said three of its more than 60 subsidiaries now own 42.05 million shares of Burlington Northern, which represent 11.9 percent of the Texas-based railroad.

Berkshire said Columbia Insurance Company holds 24.7 million shares of Burlington Northern, National Indemnity Company holds 16 million shares and National Fire & Marine Insurance Company holds 1.3 million shares.

Berkshire officials do not typically comment on the company's stock holdings, and spokeswoman Jackie Wilson said no one was available to discuss the firm's railroad investments Friday.

But Buffett has said 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 Corp. and nearly 6.4 million shares of Norfolk Southern Corp.

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 is not clear how much Union Pacific and Norfolk Southern stock Berkshire currently owns.

When Berkshire disclosed its initial Burlington Northern purchases in April, the news sent shares of all major freight railroads higher.

Burlington Northern's shares gained 54 cents in after-hours trading after finishing at $79.56 Friday.

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