This Could be Warren Buffett’s Next Big Purchase

The Oracle of Omaha may be gearing up for a pretty big purchase soon according an industry analyst.

Warren Buffett may soom be purchasing Southwest Airlines according to Wolfe Research. According to the firm the airline “seems like the most logical candidate.”

Analyst Hunter Keay of the firm wrote, “Warren Buffett recently said he might buy a whole airline and that he wants to do a ‘huge’ deal while bemoaning market valuations. We speculate on which airline BRK [Berkshire Hathaway] may buy, too, using BRK’s historical buying patterns as a guide through a data-driven analysis, ranking each one relative to others.”

It was in February that Buffett had said to CNBC, “I wouldn’t rule out owning an entire airline.”

According to Keay, the airline “screens well on those, as does DAL but to a lesser extent … LUV seems like the most logical candidate.”

It was revealed in Warren Buffett’s Berkshire Hathaway annual letter that the company already owns over $3 billion in Southwest Airlines.

“Berkshire’s goal is to substantially increase the earnings of its non-insurance group. For that to happen, we will need to make one or more huge acquisitions. We certainly have the resources to do so,” Buffett wrote in the letter.

“This extraordinary liquidity earns only a pittance and is far beyond the level Charlie and I wish Berkshire to have. Our smiles will broaden when we have redeployed Berkshire’s excess funds into more productive assets.”

Disclaimer: We have no position in Southwest Airlines Co. (NYSE: LUV) and have not been compensated for this article.