Why Buffett Still Loves This Industry

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The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Isaac Pino and technology editor/analyst Andrew Tonner discuss topics across the investing world.

Warren Buffett and Charlie Munger admit they arrived late to the train station when they started evaluating Burlington Northern Santa Fe, but that didn't stop Berkshire Hathaway from buying the railroad outright and realizing substantial gains. Buffett outlines in his letter to shareholders why he believes that this regulated industry will continue to generate cash for debt financing and track improvements, and ultimately reward shareholders. BNSF is a private holding, but there are other railroads that service America's major markets where investors can find value opportunities. Isaac and Andrew break down the industry and the largest companies within.

Transportation methods will continue to evolve, but one thing seems for sure -- spiking oil prices look like they are here to stay. Railroads present a value proposition during a period of high oil prices, but there's another way to tap into surging profits for energy companies. Take a look at the top oil stocks recommended by Motley Fool analysts in a recent special free report: "3 Stocks for $100 Oil." The report won't be available forever, so we invite you to enjoy a free copy today. You can access it by clicking here. Fool on!

At the time this article was published Andrew Tonner has no positions in the stocks mentioned above. Isaac Pino owns shares of CSX. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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