Buffett likes railroads, outlook not "sensational"
OMAHA, Nebraska (Reuters) - Warren Buffett, whose Berkshire Hathaway Inc. (BRKa.N) (BRKb.N) recently bought large stakes in three railroads, said on Saturday that business would never be "sensational," yet its prospects had improved.
"What was a terrible business 30 years ago (is) a better business now," Buffett said at Berkshire's annual shareholder meeting. "It will never be a sensational business."
Buffett called railroads a "very capital-intensive" business, but said there "isn't a whole lot of new capacity. ... It could be a lot better business than in the past."
Shares of several railroads rose on Monday, April 9, after Berkshire disclosed in a regulatory filing the previous Friday that it had accumulated a 10.9 percent stake, worth $3.23 billion, in Burlington Northern Santa Fe Corp (BNI.N).
On April 9, Berkshire said it also spent $700 million for a stake in a second railroad company, and slightly less to invest in a third. The other companies' identities remain unclear.
Major U.S. railroad companies whose shares rose April 9 on news of the Buffett investments included Burlington Northern, CSX Corp. (CSX.N), Norfolk Southern Corp. (NSC.N) and Union Pacific Corp (UNP.N).
