Next Berkshire Hathaway Quest Not an Impossible Dream

As for Biglari Holdings, the hopes there are pinned on CEO Sardar Biglari, a controversial figure, who has drawn comparisons from some to Buffett. But along with that has come scorn, because Biglari has made some very un-Buffett like moves. Besides pressing to change the company's name from Steak n Shake, to one bearing his own name, Biglari has taken aggressive stances when it comes to shareholder activism. He's launched a very public fight with Cracker Barrel (CBRL) for board seats, and changes at that company, having amassed a 19.99% stake -- which is just below the 20% threshold that would trigger CBRL's poison pill.

He's had some successes, helping to turn around fast food name Steak n Shake, which is owned by Biglari Holdings. He's used cash flow generated by Steak n Shake, and Western Sizzlin (also owned by BH) to build a stake in Cracker Barrel worth about $303 million. Biglari Holdings' market cap is more than $500 million, so this is becoming a sum of the parts story.

Still unresolved is the company's attempt to adopt a dual share class structure, a matter that needs shareholder approval. The meeting to vote on the proposal has been delayed twice, leading to speculation that the votes aren't there. If passed, the company would have Class A and Class B shares; with the former having the lion's share of the voting rights. Berkshire Hathaway has a similar structure, which has only furthered criticism that Biglari is trying to be Buffett.

While the jury is still out on Biglari's prowess as a capital allocator, I've been impressed enough to build a position in his company. Not everyone is impressed, for sure. Biglari, at times, appears to be a bull in a china shop; very un-Buffett like.

The quest for the next Berkshire Hathaway -- no matter how hopeless, no matter how far -- continues.

At the time of publication the author held long positions in PICO and BH.

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This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Jonathan Heller, CFA, is president of KEJ Financial Advisors, his fee-only financial planning company. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit.

Jon is also the founder of the Cheap Stocks Web site, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.

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