Time to buy Berkshire is now says Barclays

"Berkshire's (BRK.A, BRK.B) insurance business generates substantial no-cost float ($77B at year-end 2013) available for investing and will benefit from the Heinz acquisition," says Barclays' Jay Gelb, calling now a good time to buy the stock. "Importantly, Berkshire has significant cash available for additional acquisitions (we estimate about $25B) to supplement organic growth."

Gelb also notes Berkshire has substantial leverage to an improving economy and housing market, with non-insurance operations now accounting for two-thirds of operating earnings. The stock trades at 1.41x book, just above the 1.2x at which Buffett says he's buying back stock.

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Comments (17)
  • Sum02006
    , contributor
    Comments (461) | Send Message
    Seems to me that Barclays' suggestion is about three months behind.
    28 Apr 2014, 02:07 PM Reply Like
  • Maine Reader
    , contributor
    Comments (270) | Send Message
    Yes. Almost precisely 3 months since the low at beginning of February. I spent every available $ at 110.


    Perhaps Barclay's has been waiting to see "momentum" before making this call. Seems to have missed a big chunk of the near term upside.


    1.41x book is a bit higher than recent price to book range. I will buy more BRK.B if we see $115 over the next few months.
    28 Apr 2014, 04:56 PM Reply Like
  • Patent News
    , contributor
    Comments (1475) | Send Message
    1.2 book does not equal 1.41 book. which world are they in?
    28 Apr 2014, 02:10 PM Reply Like
  • DAVE22Q
    , contributor
    Comments (413) | Send Message
    sure it is a good stock but it generally moves with the market. if you think this correction is about done then buy now. I suspect by waiting you can get it a couple of points lower, more if the 10% correction alarmists are right for a change.
    I see no reason to rush on this one.
    28 Apr 2014, 02:23 PM Reply Like
  • walterrn
    , contributor
    Comments (329) | Send Message
    Agree with all of the above
    28 Apr 2014, 03:00 PM Reply Like
  • Mike Serebrennik
    , contributor
    Comments (1239) | Send Message
    Or is this a veiled way of saying "go to quality, junk will go down the most in the coming correction?"
    28 Apr 2014, 03:03 PM Reply Like
  • mrdruss
    , contributor
    Comments (67) | Send Message
    BUY BUY BUY, great companies at a good price, will beat mediocre to poor companies at a great price, over the long-term, almost everytime!!!!!!!!!!!
    28 Apr 2014, 03:09 PM Reply Like
  • keepingitsimple
    , contributor
    Comments (11) | Send Message
    We bought in just before the split and now have a double and it is still more of a value investment today. Berkshire B is rock solid is a much better investment than an index or like mutual fund with less volatility.This is an investment you can still buy and hold...and not worry! ZZZZZZZZZZzzzzzzzzzzzzzzz
    28 Apr 2014, 03:17 PM Reply Like
  • locutus49
    , contributor
    Comments (1057) | Send Message
    What split? Brk.A did not split, to my knowledge. They only created a separate class of Brk, termed Brk.B.


    I know this because I owned a share of class A when they created the B shares, and I received nothing.
    28 Apr 2014, 04:42 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (7222) | Send Message
    If I only had the money. It is nice to buy when the market is down, but if all your money is in stocks, you have to take a loss to get fresh capital.
    28 Apr 2014, 08:18 PM Reply Like
  • BCVolkert@att.net
    , contributor
    Comment (1) | Send Message
    Originally BRK.B was 1/30 of a share of BRK.A. As a result of the Burlington Northern acquisition, there was a reason to split it again at 50:1. On that basis you'd expect the ration to be exactly 1500:1. Now BRK.B (127.70) is not quite 1/1500 of a share of BRK.A (191,400.00). It is 191400/127.7 = 1498.82. I suspect the ratio varies just a little from time-to-time and may reflect the advantage of being a bit more liquid or the cost of making the market.
    28 Apr 2014, 08:28 PM Reply Like
  • User 24360883
    , contributor
    Comment (1) | Send Message
    Anything with a buffet put protection should trade on more than 1.14x book, almost as good as a buyback??
    29 Apr 2014, 04:48 AM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
    SA contributor. Ocean Man called a buy at 113$ maybe Barclays should hire him!!
    29 Apr 2014, 08:27 AM Reply Like
  • John McCoy
    , contributor
    Comments (304) | Send Message
    "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."


    -Warren Buffett


    I called a buy on BRK-B just before the Burlington split and have been buying it on and off ever since. BRK-B, and my newest long position, MKL, are going to be very long term holds in my portfolio.
    1 May 2014, 07:00 PM Reply Like
  • combatcorpsmanVN
    , contributor
    Comments (1364) | Send Message
    BRK.A/B are stock to own when a person/partner wants to know what it really is like to own a company that truly enhances shareholder value. If one or two years are your timeframe, you're in the wrong stock. If you crave dividends, there are many other stocks out there to satisfy that craving.


    If you want a piece of Burlington Northern and a gilt-edged piece of the Energy complex along w/ products and services that are purchased every day of every year, you want to own BRK.A/B.


    Finally, if you want to receive cogent advice and have a few laughs, you want to own Berkshire imo.
    3 May 2014, 12:46 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (7222) | Send Message
    By the way, the (BRK.B) meeting is this weekend. Did anybody go to it?
    3 May 2014, 05:32 PM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
    I couldn't make it which sucks really wanted to get a pair of those buffet running shoes lol
    3 May 2014, 06:10 PM Reply Like
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