The real estate company Warren Buffett just invested in is soaring

Store Capital’s stock price is getting a huge boost from everyone’s favourite Nebraskan investor.

Store Capital, a real estate investment trust, announced a $US377 million stake by Warren Buffett on Monday. This amounted to 9.8% of the company’s outstanding shares. Store Capital is known for investing in single-tenant real estate.

“An investment in our company from one of history’s most admired investors represents a vote of confidence in our experienced leadership team and an affirmation of our profit-center real estate investment and management approach,” said Christopher Holk, Store Capital’s CEO. He was referring to Berkshire Hathaway chairman Warren Buffett.

The Warren Buffett effect is probably in play here. Matt Levine, a Bloomberg columnist, put it best in a newsletter following Buffett’s C$2 billion credit line to Home Capital last week.

“In its purest form, once you have a reputation as a smart investor, then every time you buy a stock (and announce it publicly), everybody out there will look and say, ‘that is a smart investor,’ and they will buy the stock, and the stock will go up, and you will make money, and everyone will think you are a smart investor because you made money, and it is a virtuous cycle that you can repeat indefinitely.”

Store Capital has not had a great year. The company is down 6.72% so far in 2017, even after the more than 10% boost from Buffett’s investment. The company is currently trading at $US23.04.

Click here to read more about Store Capital …

NOW WATCH: An economist explains the key issues that Trump needs to address to boost the economy

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.