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Originally published Wednesday, February 3, 2010 at 5:09 PM

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Analysis

Today, burgers; tomorrow, Berkshire

Could a Midwestern fast-food chain really become the next Berkshire Hathaway? Steak n Shake (SNS) is acting like it thinks so. The Indianapolis-based company is...

The Associated Press

Analysis |

Could a Midwestern fast-food chain really become the next Berkshire Hathaway?

Steak n Shake (SNS) is acting like it thinks so. The Indianapolis-based company is known on its home turf for made-to-order steak burgers, "hand-dipped" shakes and sassy commercials. Elsewhere, it's hardly known at all.

But the company's chairman, Sardar Biglari, has made a series of moves that try to successfully mimic those of his hero, Berkshire founder Warren Buffett.

Biglari, 32, converted Steak n Shake into a holding company, similar to Berkshire, that owns other kinds of businesses.

In December, he made an unsolicited bid for insurer Fremont Michigan InsuraCorp. Berkshire uses cash from its insurance firms to fund acquisitions.

Also in December, Biglari engineered a Berkshire-like 1-for-20 reverse split that raised Steak n Shake's share price from $14 to $288.

Wanna buy this wannabe? It's trading at about 20 times 2010 earnings estimates so analyst Michael Gallo of CL King & Associates advises investors to wait for the price to dip.

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