If Burlington Northern Is 'Fully Valued', Is Berkshire Overvalued?
Ravi Nagarajan submits:In an amended filing of the proxy for Berkshire Hathaway’s (BRK.A) proposed acquisition of Burlington Northern Santa Fe (BNI), new details have been provided regarding Burlington Northern’s management forecasts of future results based on a number of different macroeconomic assumptions. The restrained nature of the forecasts and the fact that management projections for 2010 net income are lower than Wall Street consensus forecasts, even under the most optimistic scenario, was the subject of an article in Barron’s over the weekend. In addition, Warren Buffett’s comment during negotiations that Burlington Northern is worth approximately mid-$90s per share has attracted attention particularly given Berkshire’s use of stock to fund part of the transaction. Let’s take a brief look at some of the more interesting information in the latest proxy filing.Complete Story »