There are so many reasons investors ought to keep Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.B) on their watch list. Among these, the company’s announcement that it is spending U.S.$4 Billion on natural gas pipeline assets previously owned by Dominion Energy is among the more shocking recent developments for this company.
This is because Berkshire has been infamously silent on new acquisitions for some time, choosing to sit on its U.S.$250 Billion plus cash hoard and wait for better opportunities to arise.
This investment in natural gas pipeline and storage assets indicates to the market that Buffett is overall a bull on energy infrastructure.
This makes sense, as many in the financial community often refer to pipelines as the "rail" of the energy sector, and we know how much Buffett like railroad assets. Similar to railroads, pipelines are extremely expensive and difficult to build. These assets have high levels of capital required to maintain said assets, but generally have a high level of pricing power due to the extremely high barriers to entry these sectors naturally provide.
I like this acquisition and it furthers any investment thesis for certain Canadian energy infrastructure companies like Enbridge Inc. (TSX:ENB)(NYSE:ENB) I have thought have been undervalued for a long time. I would encourage investors to do their "Buffett-style" investigative analysis on the sector to see what I’m talking about and add various Canadian energy infrastructure stocks to their watch list now.
Invest wisely, my friends.
