| Buffett Lets It Ride on the Railroad Ockham Research submits: Tuesday Warren Buffett announced his company, Berkshire Hathaway (BRK.A), would make its largest acquisition to date in Burlington Northern Sante Fe (BNI). When Warren makes a move, everyone takes notice. His affinity for this railroad operator has been no secret as he had steadily acquired a 24% stake in the company over the last few years, and now he is spending about $26 billion in cash and stock in order to buy up the rest of the company. In addition to the deal, valued at $100 per share Buffett will assume about $10 billion in debt, making the total value of the company in excess of $44 billion. This is a major move by any standard, and Buffett has said that this is essentially, “an all-in wager on the future of the U.S. economy.” One of Buffett’s most famous sayings is, “the best time to sell as stock is never.” Clearly, Buffett sees a quality investment in the railroad industry and he sees rail as the way more goods will be transported throughout the U.S. in the future. He has believed in the power of rails for sometime as he acquired a railcar manufacturer and leaser last year in Union Tank Car.Complete Story » seekingalpha.com |
Is the Airline ETF Toast? Invest With An Edge submits: By Patrick WatsonLike a lot of people, I used to enjoy flying. Packing up, going to the airport, standing in line, and jetting off to exotic places like Chicago was a welcome break in my otherwise non-adventurous life. No more. Now I view airline travel as an occasional necessary evil.Complete Story » seekingalpha.com |
Airline ETF in Focus on Merger Talks Michael Johnston submits:The airline industry is no stranger to the headlines. This sector has been in focus quite regularly in recent years as reports of bankruptcies, restructurings, and strikes have become common occurrences. But the last year has seen some some positive developments mixed in with the bad. The flow of red ink has been stemmed as business travelers have returned to the air and international flights have picked up. The Claymore/NYSE Arca Airline ETF (FAA) has been one of the best performing equity ETFs since the market bottomed out in March 2009, gaining more than 165% in that period. Airline equities (and FAA) got another boost on Thursday on news that UAL Corporation (UAUA) and US Airways (LCC) are in merger discussions, a deal that could potentially create one of the world’s largest airlines. Both companies have been vocal proponents of consolidation within the airline space as a way to gain efficiencies and boost sagging revenues. “The investor seems to have spoken,” said United CEO Glenn Tilton to The Financial Times earlier this year. “The market seems to have suggested that scope and scale in a global business are important.”Complete Story » seekingalpha.com |
The Electric Car Market: Charging Up Portfolios Investment U submits: By David FesslerI recently plunked down a deposit for a Nissan (NSANY.PK) LEAF – the world’s first all-electric car, which is destined to hit the United States in big numbers. I figure since I work from my home office and don’t drive much, I’ll use the Nissan as my everyday car and leave the gas-guzzler for longer trips.Complete Story » seekingalpha.com |
Transportation Sector Defies Slowdown ... for Now Streetwise Blog submits: The global economic rebound has been anaemic, but it is providing just enough juice for growth in the transportation market. The International Air Transport Association predicts a $8.9 billion (U.S.) net profit in 2010 on the back of stronger demand and better yields. North American railway carload volumes have also risen 12% year-over-year in 2010. Canadian National Railway’s (CNI) volume is up 14% and Canadian Pacific Railway’s (CP) is up 9%.Complete Story » seekingalpha.com |