🚌 In 1953, Buffett invested in Union Street Railway, attracted by its substantial cash holdings.
💰 The company declared an extra dividend of $50 per share in 1955, which Buffett considered key to unlocking value.
📈 Union Street Railway reversed some losses and became profitable in 1955, generating $5.6 per share.
✅ Buffett nearly doubled his investment, achieving an annual return close to 30%.
@adriarivero:
“When Buffett analyzed Union Street Railway in 1953, he found an opportunity. The company’s stock was trading between $30 and $35 per share, but it had cash on hand equivalent to $8.13 per share. In 1955, Union Street Railway declared an extra dividend of $50 per share, a move that Buffett considered key to unlocking value. By 1957, after receiving $50 per share in dividends and other additional dividends, the price of the shares was between $20 and $28. Therefore, he had basically doubled the investment, considering everything, and that was an annual return close to 30%.”
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