Warren Buffett's holding company was up in midday trading after Barron's labeled the stock as cheap.
SHARES OF BERKSHIRE HATHAWAY (ticker: BRKA) were up 2.8% in midday trading Monday, after a Barron's article that noted Warren Buffett's company is a cheap investment.
In "For Buffett Fans, The Price Is Right" Barron's Associate Editor Andrew Bary wrote that the stock looks appealing, as it trades at just 1.2 times its current estimated book value and its price-to-book ratio is near the low reached in early 2000.
It is still a pricy on a per-stock basis, around $85,000 a share, but some believe the stock could top $100,000 in the next year. If the economy recovers quickly, the shares could even bump up against $125,000.
The Class B shares (BRKB) are undoubtedly more affordable, around $2,700 and trade at a 3% discount to their theoretical value. However, that discount has been around for some time, and may continue even as the Class A shares take off.
Investors will also benefit from the many investments Buffett has made, at a time when scarce capital has allowed him to drive hard bargains, including preferred stock and warrants issued by Goldman Sachs and General Electric.Related Links
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1 comment:
The same happy fate befell a low P/E stock by the name of Cal-Maine [CALM] some time ago. It hasn't done much subsequently, but that's pretty good performance for this last month's market.
As far as Berkshire is concerned, I don't know if the Barron's write-up will provide a catalyst to get it into one of its intermittent price leaps. Nevertheless, they're right about the company. The best time to get into Berkshire has always been after a spot of trouble.
[Actually, the best time to get into BRK is after it's underperformed the S&P 500 in a calendar year. This condition doesn't hold as of 2008.]
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