Buffett may eye stake sales after rail deal

By Lilla Zuill and Paritosh Bansal

NEW YORK (Reuters) - Warren Buffett's latest deal -- huge even by the billionaire investor's own standards -- could put the Oracle of Omaha in the mood to sell some of his massive portfolio of stakes in marquee U.S. companies.

Before embarking on any more big takeovers, Buffett's Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research)(BRKb.N: Quote, Profile, Research) could focus on replenishing its coffers by selling some securities' holdings from the 80-odd companies within the conglomerate, some Buffett watchers said.

Berkshire's $26 billion deal to take over Burlington Northern Santa Fe Corp (BNI.N: Quote, Profile, Research) comes on top of a roughly $11 billion spending spree to make a slew of major, high-yielding investments, including in Goldman Sachs Group Inc (GS.N: Quote, Profile, Research) and General Electric (GE.N: Quote, Profile, Research).

The Burlington Northern deal will deplete Berkshire's cash closer to the minimum $10 billion that Buffett likes to hold. The conglomerate will also take on about $8 billion in additional debt, something that Buffett is typically wary to do.

"He is almost fully invested, and while cash is always coming in, there will be less of it unless he gets something sold," said Timothy Vick, senior portfolio manager with Sanibel Captiva Trust Co in Sanibel Island, Florida and the author of "How to Pick Stocks like Warren Buffett."

He added that Buffett often spends as he sells, and has done that in the past year when he sold some of his stake in Johnson & Johnson (JNJ.N: Quote, Profile, Research) and Procter & Gamble (PG.N: Quote, Profile, Research) to go on a spending spree to snap up high-yielding investments elsewhere.

Besides Goldman and GE, these also included deals to buy stock in reinsurer Swiss Re (RUKN.VX: Quote, Profile, Research).

In an interview on CNBC, Buffett said that after Burlington Northern "we won't be making any huge deals for a while."