Tuesday 9 July 2013

Analysis of Berkshire Hathaway "small"

American conglomerate currently lead by Warren Buffett and Charlie Munger

Company: Berkshire Hathaway

Business: An American conglomerate that is involved in companies in any industry. For a longer list of companies fully owned by Berkshire please see here. For taking a look at the stocks that they own in the US please see here.

Active: They were for a long time very focused on the US but have started to move further out in the world and of course the companies they own fully or parts of are world wide.

P/E: 19.2

 The P/E of Berkshire is high with its 19.2 and the price to book is also high with 1.5 which means that according to Graham this company is not a buy. The earnings to sale is at 9% which sounds much better then what Loews corporation showed on the table. The book to debt is also very nice with 0.8 a well run company. In the last five years the growth has been over 8% per year which leads to a motivated P/E of around 25. They pay no dividends, never have and never will as long as Warren & Charlie are there. I must say that one gets impressed when looking at the figures.

Conclusion: Another buy and hold company! You can buy the "small" stocks or the real manly ones but those are not for little boys like me obviously. One manly stock goes for the price of : 172,201 $.
Berkshire is like a great index fond and should be treated as such. Buy it and go on vacation! Today I would love to buy Berkshire but also here I will wait until my time has run out.

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