STOCK MARKET WATCH -- Thursday, 1 March 2012

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48. Buffett Poised to Win Wager on America With Burlington

http://www.bloomberg.com/news/2012-03-01/buffett-poised-to-win-wager-on-america-with-burlington-freight.html

When Warren Buffett bought North America’s second-biggest railroad, he called it an “all-in wager” on the U.S. economy. It’s turning out to be a pretty good bet on the oil industry, too.

Burlington Northern Santa Fe’s track network puts it among the best situated of its peers to meet shipping demand for fracking sand, pipe and crude in the northern U.S. Bakken region, where oil production has more than tripled since 2008, according to data compiled by Bloomberg.

Gains in mineral and chemical carloads helped Burlington Northern pay a $1 billion distribution to Buffett’s Berkshire Hathaway Inc. (BRK/B) last month. The railroad is the busiest in the U.S. in 2012 by traffic, positioning it to build on a 16 percent jump in 2011 sales that helped narrow the revenue lead of Union Pacific (UNP) Corp., which lacks tracks into the Bakken area.

“It’s kind of like if somebody discovers gold in your backyard but not your neighbor’s,” said John Anderson, advisory director at Greenbriar Equity Group, a private-equity firm based in Rye, New York, focused on the transportation industry. “It’s just good luck.”