Buffett’s Berkshire Nearly Doubles Union Pacific Stake In 2Q

Aug.18, 2008 in Market Outlook

Last Update: 8/15/2008 10:15:46 AM

By Sam Mamudi

The investment vehicle of legendary investor Warren Buffett nearly doubled its
stake in transport outfit Union Pacific Corp. (UNP) in the second quarter.

Berkshire Hathaway Inc. (BRKA, BRKB) also added stakes in Bank of America Corp.
(BAC), Lowe’s Cos. (LOW) and NRG Energy Inc. (NRG), according to filings released
Friday morning.

Berkshire Hathaway grew its Union Pacific stake to 8.906 million at the end of
the second quarter from 4.453 million shares at the end of the first quarter.
Shares of Union Pacific are up about 24% this year.

Union Pacific reported record second-quarter profits of $531 million, or $1.02 a
share, up from $446 million, or 82 cents a share, in the second quarter of 2007.

The company also voted July 31 to increase its quarterly dividend by 5 cents, or
23%, to 27 cents a share. The dividend, payable Oct. 1, marked the third increase
in the past 18 months.

Berkshire’s addition of NRG Energy totaled 3.24 million shares in the second
quarter, worth $139 million. While NRG’s stock is down 18.7% this year, the
energy sector is considered a good investment by money managers right now.

The two sell-offs in Berkshire’s portfolio in the recent quarter were both
related to acquisition deals. Trane Inc. was sold off in an acquisition by
Ingersoll-Rand Company Ltd. (IR). Similarly, Berkshire eased its stake in
Anheuser Busch Cos. from more than 35 million shares to less than 14 million
shares in the wake of Anheuser’s merger with InBev (INB.BT), which had yet to be
consummated as of the second quarter.

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