Company Summaries
Burlington Northern Santa Fe Corp.
Originally Created: February 4, 2008
Business: Burlington Northern Santa Fe Corp.
NYSE: BNI
Founded in 1849 and through its subsidiaries operates one of the largest North American rail networks with approximately 32,000 route miles in 28 states and 2 Canadian provinces. Transports consumer, industrial, coal, and agricultural products.
Reasons to be interested:
1. With higher oil and energy prices all around, railroads are becoming increasingly attractive economically and more and more are providing a cheaper alternative to ship products around the U.S. Burlington Northern is a leading rail operator in the U.S. and in a great position to benefit from this trend.
2. Company is a very strong cash flow producer, producing $3.49 billion in 2007 while repurchasing $1.12 billion worth of stock in the same period. The company is steady financially and has a very experienced and dedicated management team, putting it in a good position to take advantage of the growing opportunity in front of it.
3. Over the past year Berkshire Hathaway (Warren Buffett's company) has purchased 63.79 million shares of Burlington, which amounts to a 18.19% stake. Certainly not a bad endorsement for the company.
Main risk:
1. The stock, which was below $80 just a few weeks ago, is now sitting at $88, so now may not be the ideal time to buy. But the long-term risks are relatively minimal and we aren't interested in timing the market.
NYSE: BNI
Founded in 1849 and through its subsidiaries operates one of the largest North American rail networks with approximately 32,000 route miles in 28 states and 2 Canadian provinces. Transports consumer, industrial, coal, and agricultural products.
Reasons to be interested:
1. With higher oil and energy prices all around, railroads are becoming increasingly attractive economically and more and more are providing a cheaper alternative to ship products around the U.S. Burlington Northern is a leading rail operator in the U.S. and in a great position to benefit from this trend.
2. Company is a very strong cash flow producer, producing $3.49 billion in 2007 while repurchasing $1.12 billion worth of stock in the same period. The company is steady financially and has a very experienced and dedicated management team, putting it in a good position to take advantage of the growing opportunity in front of it.
3. Over the past year Berkshire Hathaway (Warren Buffett's company) has purchased 63.79 million shares of Burlington, which amounts to a 18.19% stake. Certainly not a bad endorsement for the company.
Main risk:
1. The stock, which was below $80 just a few weeks ago, is now sitting at $88, so now may not be the ideal time to buy. But the long-term risks are relatively minimal and we aren't interested in timing the market.