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.
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 services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.