Warren Buffett continues to show his enthusiasm for the railroad sector. The legendary investor's Berkshire Hathaway Inc. (NYSE:BRKA) (NYSE:BRK.B) reported in a filing Thursday night that it has call options to buy 392,378 more shares of Burlington Northern Santa Fe Corporation (NYSE:BNI). BNI is already a huge holding of Berkshire Hathaway.
According to the filing, Berkshire Hathaway paid $39.10 for each option, with an exercise price of $40 per share. What that means is that Berkshire could acquire the shares of BNI at a cost slightly below today's price. Berkshire has until October 3rd to exercise the options. These options are in addition to almost 7.46 million options revealed in a SEC filing on September 4th. If all the options are exercised it would increase the company's stake in BNI to 17.2%. Berkshire currently has 52.98 million shares of BNI worth about $4.29 billion.
Burlington Northern isn't the only railroad stock that Buffett has taken a liking to. Buffett also owns 10.5 million shares of Union Pacific Corporation (NYSE:UNP) and about 6.4 million shares of Norfolk Southern Corporation (NYSE:NSC).
Buffett has in the past said that he himself was slow to realize how great of an investment railroad stocks can be because of past poor performances. It sure seems that he continues to have complete faith in these companies now.
Interestingly, just last night GrowYourFunds profiled Burlington Northern Santa Fe as one of our Top 5 Stocks that benefit from the weak dollar. I have to wonder if part of the reason that Buffett is so interested in getting his hands on all the railroad company shares he can is because of that weak dollar. Railroad companies appear to be in a great position to take advantage of what should continue to be a very strong export market.
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