If you can afford Berkshire Hathaway, buy it
Warren Buffett's conglomerate is a bargain, trading at a price-to-earnings ratio of 16.22. A $1.2 billion stock buyback announced Wednesday just sweetens the pot.
Shares of Berkshire Hathaway (BRK.A), which trade for about $134,000, are a bargain for those who can afford it.
Warren Buffett's conglomerate, which Wednesday announced a $1.2 billion stock buyback, trades at a price-earnings ratio of 16.22, near its five-year low, according to Reuters. This was too sweet a deal for the Omaha, Neb., company to pass up.
Berkshire said Wednesday that it raised the price limit it had set for itself on share repurchases to 120% of book value (assets minus liabilities). The company also purchased 9,200 Class A shares from the estate of a longtime shareholder. As Bloomberg News noted, history's greatest investor began a buyback program in 2011 after taking a pass on them for four decades. News of the buyback helped push Berkshire shares, which have gained about 16% this year, up 2.43% in afternoon trading.
The Oracle of Omaha, who has advocated raising taxes on the wealthy so persuasively that President Obama created the "Buffett Rule" to do just that, didn't escape the Great Recession unscathed. Operating earnings in the last quarter at Berkshire Hathaway fell 11% to $3.4 billion, hurt by a decline in profits from insurance underwriting, as the Associated Press notes. The 82-year-old, though, continues to find value where others don't see it in beaten-down industries such as newspapers. Earlier this year, Buffett acquired most of Media General's papers for $163 million. He has even been quoted as saying that he expects print newspapers to survive for as long as 20 years.
Naysayers may scoff at Bufffett's views on papers and taxes but they can't dispute his track record. Shares of Berkshire Hathaway have soared more than 90% over the past 10 years, outperforming the S&P 500, which gained more than 52% during the same time.
Berkshire Hathaway's holdings include GEICO Auto insurance, the BNSF railroad, Fruit of the Loom Companies and the Pampered Chef.
--Jonathan Berr wishes he could afford the stock discussed in this story but alas he has to work for a living. Follow him on Twitter @jdberr.
Yup, maybe it's all because of 12/12/12...??
But it's not the 21st......Yet.
GOOD POINT...But I kinda thought that Warren and Charlie, were somewhat losing their minds,,?
And haven't been very impressed by some of the Deals or Purchases they have made the last few years....
BUT, don't get me wrong? I've been a little student of theirs over the last several years...
And am impressed how they do most of the business...
But, they can make deals like none of us will ever have a chance to do...IMO.
But, I also hold them to the candle and strive to match or beat them in the investment game....
I invest in several of their(Berk's) picks and I have been beating them overall for about 5 years.
Not bragging, and SOME of it is luck.....I think they will clip me this year ??
But we have increased our share positions, significantly. If they"all went up"10-15%...We would blow BERK out of the water.
And yes I "almost" did buy a thousand shares of "Baby Berk"....But didn't....No REGRETS.
Remember Mr. Warren Buffet and Mr. Charlie Munger....Didn't do it overnight.
Copyright © 2014 Microsoft. All rights reserved.
As geopolitical tensions threaten to spin out of control, investors are wondering how best to position their portfolios for the global turmoil.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.