Buffett Passes Over CN Rail for Norfolk Southern and Union Pacific

Includes: CNI, NSC, UNP
by: FP Trading Desk

Warren Buffet may not be as interested in Canadian rails as previously thought.

Last month, Mr. Buffet’s Berkshire Hathaway Inc. said it had increased its stake in Texas-based Burlington Northern Santa Fe Corp. (BNI) to 11% and taken a smaller piece of two other previously undisclosed railways. At the time, analysts speculated that Virginia-based Norfolk Southern Corp. (NYSE:NSC) and Canadian National Railway Co. (NYSE:CNI) would likely be the other two railroad’s because they fit Mr. Buffet’s penchant for high-quality, cheap companies, rather than fixer-uppers.

Turns out the analysts were half right.

Berkshire revealed late Tuesday in regulatory filings that, as of March 31, it owned 6.4 million shares of Norfolk Southern valued at US$322-million, and 10.5 million shares of Nebraska’s Union Pacific Corp. (NYSE:UNP) valued at $1.07-billion.

No matter, shares in Canada’s largest railway, which boasts Bill Gates as one of its high-profile investors, have rallied since the Berkshire buy, increasing their unit value by 16% since April 5.