(The following report appeared on the Chicago Tribune website on August 31.)
CHICAGO — Billionaire investor Warren Buffett’s Berkshire Hathaway Inc. boosted its holdings in Burlington Northern Santa Fe Corp., the nation’s second-largest railroad, for the second time this week.
Berkshire, already the biggest investor, with about 15 percent, said in a regulatory filing Thursday that it bought 845,000 more shares Tuesday at a cost of $67.5 million.
Berkshire now owns 53 million shares of the Ft. Worth-based railroad. Berkshire said Monday that it added 10.1 million shares.
The latest purchase extended Buffett’s bet on railroads’ edge over trucks as fuel prices rise. U.S. diesel prices more than doubled during the past five years, to $2.87 a gallon as of Monday, according to the Energy Department.
Buffett offered his assessment of the carriers’ competitiveness at Omaha-based Berkshire’s annual meeting in May, a month after he disclosed his initial Burlington Northern stake.
Berkshire Chief Financial Officer Marc Hamburg declined to comment Thursday.
Richard Russack, a Burlington Northern spokesman, didn’t return a call seeking comment.
Since Berkshire’s original filing showing Burlington Northern holdings, Buffett has said he also bought shares of Union Pacific Corp. and Norfolk Southern Corp., the largest and fourth-largest U.S. railroads.
Burlington Northern’s appeal is not hard to discern: With its West Coast rail terminals and tracks that serve the western two-thirds of the U.S., it has been a key beneficiary of the swelling tide of imported Asian goods.
As the truck-size containers come off trans-Pacific ships, many go directly onto the flatbed cars of the intermodal trains Burlington Northern sends from the coast into the nation’s heartland.
Burlington Northern and Union Pacific also have been helped by the jump in natural-gas prices in recent years.
Electric utilities, anxious for a cheaper alternative, have ordered dramatically bigger quantities of low-sulfur coal from Wyoming’s Powder River Basin, and both railroads have ramped up the long coal trains they send to Midwestern utilities.
Berkshire Hathaway was once best known for the canny, and lucrative, long-term stock investments Buffett made in companies such as Coca-Cola Co and American Express Co.