Thank you for the insightful article. I am wondering whether the conclusion is a little bit too rosy. If we look at the free cash flow generated by BNSF(=cash flow generated by operating activities-capex) vs. the appreciation of the shares BRK issued to acquire BNSF, the investment does not look so successful. From the acquisition till 2024, free cash flow generated was 47.4bn(=102.6bn-55.2bn)，total dividend was 57.7bn, both less than the 62.5bn appreciation of the value of shares issued. Not to mention BRK also paid cash in addition. BRK would be better off not acquiring BNSF.
I also think if BNSF is listed, it would be evaluated cheaper than UP, because its profitability and capital return are both much lower than the latter. As a matter of fact, before it was acquired by BRK, its PER was also lower than UP.
Highly appreciate if you could share your views regarding these points.
Thank you for the insightful article. I am wondering whether the conclusion is a little bit too rosy. If we look at the free cash flow generated by BNSF(=cash flow generated by operating activities-capex) vs. the appreciation of the shares BRK issued to acquire BNSF, the investment does not look so successful. From the acquisition till 2024, free cash flow generated was 47.4bn(=102.6bn-55.2bn)，total dividend was 57.7bn, both less than the 62.5bn appreciation of the value of shares issued. Not to mention BRK also paid cash in addition. BRK would be better off not acquiring BNSF.
I also think if BNSF is listed, it would be evaluated cheaper than UP, because its profitability and capital return are both much lower than the latter. As a matter of fact, before it was acquired by BRK, its PER was also lower than UP.
Highly appreciate if you could share your views regarding these points.
Really interesting! Thank you for the insights :)
Very well researched and written. Thanks.