Warren Buffett Is Going Elephant Hunting - Who's On His List? (BRK-A) (BRK-B)

Speculators are scrambling today after Warren Buffett indicated in his annual shareholder letter that his Berkshire Hathaway (NYSE: BRK/A) (NYSE: BRK/B) is on the prowl for another major takeover, after last year's Burlington Northern deal.

The comment in the letter that is getting everyone's attetnion is:

Charlie and I hope that the per-share earnings of our non-insurance businesses continue to increase at a decent rate. But the job gets tougher as the numbers get larger. We will need both good performance from our current businesses and more major acquisitions. We're prepared. Our elephant gun has been reloaded, and my trigger finger is itchy.

Here is a list of companies that could be seen as potential targets for Buffett:

• USG Corp. (NYSE: USG): Wallboard maker USG has been a long-time holding of Buffett's Berkshire. If Mr. Buffett sees signs that the construction market is turning he may pounce at an opportunity to buy the entire company.
  
  
• FedEx (NYSE: FDX): Buffett likes companies that can raise prices at will and FedEx is one company that can. Buffett already owns a small stake in rival UPS (NYSE: UPS), but UPS has a significantly larger market cap. At around $28.5 billion currently, FedEx could make a great target for Buffett.
  
  
• Western Union (NYSE: WU): After owning shares in the company, Buffett sold his Western Union stake in 2007. While out of the stock now, Buffett is very familiar with the world's largest money-transfer business and the company would make a perfect fit for Buffett. Interestingly, new Berkshire fund manager Todd Combs told clients of his old hedge fund that he liked Western Union.
  
  
• Union Pacific (NYSE: UNP): Buffett had a position in Union Pacific around the same time he started building his position in Burlington Northern, which he later acquired. He sold out of UNP with the Burlington Northern acquisition. In his annual letter, Buffett indicated rail is a great business and the results from Burlington Northern were better than expected. He could acquire another railroad to increase his exposure.
  
  
• Norfolk Southern (NYSE: NSC): Like UNP, Buffett also had a position in
  Norfolk Southern. He could be interested in Norfolk Southern for the same above reasons.
  
  
• CSX (NYSE: CSX): While Buffett never had a recent stake in CSX, CSX could be a good fit for his rail strategy.
  
  
• Bank of New York (NYSE: BK): Buffett initiated a stake in BK in the third quarter of 2010. While he trimmed this stake slightly in the fourth quarter, he still owns 1,793,915 shares.

If you spot any others that could make sense as a Warren Buffett takeover target please comment below with some reasons.

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