The billionaire investor told CNBC last month, “I wouldn’t rule out owning an entire airline.”
The analyst said Buffett likes to buy companies with solid cash flows, strong competitive advantages and “high-grade” management teams.
Southwest Airlines “screens well on those, as does DAL but to a lesser extent … LUV seems like the most logical candidate,” he wrote.
Berkshire Hathaway already has a large stake of more than $3 billion in Southwest Airlines, according to the company’s 2017 annual letter.
The Oracle of Omaha added in the letter he is itching to do a massive acquisition, but is having a difficult time due to elevated valuations. At year-end last year Berkshire Hathaway had $116 billion in cash and short-term Treasury bills compared with $86.4 billion at the end of 2016.
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