Berkshire Hathaway: Trading At An Estimated 11.6x Earnings With An Intrinsic Value Of $180/Share
Left Shark Investing • 232 Comments
Left Shark Investing • 232 Comments
Tue, Feb. 16, 4:27 PM
Thu, Feb. 4, 3:58 PM
- Berkshire Hathaway (BRK.A, BRK.B) discloses the purchase of 1.69M more shares this week of Phillips 66 (PSX +0.9%) worth ~$132M to give it ownership of nearly 14% of the oil refiner.
- Over 15 days of buying since Jan. 4, Warren Buffett's conglomerate has spent $964M to add 12.5M shares to its PSX stake.
- The new purchases were made between $77.40 and $78.53; the average price paid overall for the January and February buys is $77.13.
Sun, Jan. 31, 9:07 AM
- Berkshire Hathaway (BRK.A, BRK.B) has resumed its purchases of Phillips 66 (NYSE:PSX), spending roughly $832M in January to boost its stake even as the oil refiner's profit margins narrowed.
- According to a regulatory filing, the conglomerate paid about $198M last week for 2.54M shares of PSX, giving it 72.29M overall, or a roughly 13.7% stake in the company.
- Phillips 66 is Berkshire's sixth-largest stock holding.
Fri, Jan. 29, 4:58 PM
- For the first time, Berkshire Hathaway (BRK.A +3.2%, BRK.B +2.8%) plans to webcast its annual meeting -- a k a "Capitalist Woodstock" -- meaning that investors who can't make the pilgrimage to Omaha, Neb., may take part.
- The move should give the meeting a broader reach than the tens of thousands who descend on Nebraska each April to hear from Warren Buffett and Charlie Munger.
- No word yet on how to access the webcast, or whether the stream will be filled with Geico ads.
Tue, Jan. 26, 4:59 PM
- Berkshire Hathaway-owned BNSF Railway (BRK.A, BRK.B) says it plans to reduce capital spending for the first time in six years, as railroads seek to reduce costs amid a freight slump.
- BNSF says it will spend $4.3B in 2016, down 26% from a record $5.8B in 2015, on locomotives, rail cars, track and maintenance, after increasing investment steadily since 2010.
- BNSF joins Union Pacific (NYSE:UNP), CSX and Kansas City Southern (NYSE:KSU) in lowering spending amid a drop in carloads, led down by coal; UNP plans to spend $3.75B this year, down from $4.2B last year, CSX is paring $100M off last year’s $2.5B, and KSU plans to spend $580M-$590M vs. $649M last year.
Fri, Jan. 22, 12:28 PM
- The S&P 500 is ahead by 1.55%, but Berkshire Hathaway (BRK.A, BRK.B) is barely in the green, with American Express plunging 11.7% following its results last night and IBM - still smarting from its Q4 report earlier this week - slipping another 0.6%.
- For the year, BRK is down just 3.9% vs. the S&P 500's 6.9% decline.
- Previously: American Express plunges after results; ValueAct reportedly exits (Jan. 22)
Tue, Jan. 19, 5:58 PM
- Canadian Pacific Railway (NYSE:CP) files a complaint with the U.S. Department of Justice alleging some of its competitors have worked together to block its attempt to merge with Norfolk Southern (NYSE:NSC).
- "The fact that these major railroads have joined to work so feverishly against CP’s proposal speaks volumes about their concerns regarding the impact the transaction would have on their competitive positions,” CP says in its letter to the DoJ.
- Union Pacific (NYSE:UNP), for one, disputes the allegation, saying “We have communicated with other railroads for the purpose of petitioning the government. We oppose this merger, and we are prepared to discuss our views with the government."
- Related tickers: CSX, BRK.A, BRK.B
Fri, Jan. 15, 5:45 PM
- The U.S. Federal Railroad Administration expects to scrutinize the "significant safety hurdles” that would result from merging any of the major U.S. railroads, the head of the agency tells WSJ, a move that could place another obstacle in the way of Canadian Pacific’s (NYSE:CP) takeover attempt for Norfolk Southern (NYSE:NSC).
- The FRA is not empowered to block railroad mergers, which require approval by the Surface Transportation Board, but it can work with railroads on a “safety integration plan" to ensure safe operations in the case of a merger under largely untested rules put in place in 2001.
- Shippers have been filing letters with the STB to oppose a CP-NSC merger, concerned about potential price increases and service problems; other railroads also oppose the merger, including CSX, Union Pacific (NYSE:UNP) and BNSF (BRK.A, BRK.B).
Thu, Jan. 14, 1:13 PM
- At issue according to Democrats on the House Financial Services Committee is a month-old news story accusing the mobile home company of targeting minority borrowers with discriminatory lending and collection practices.
- The Berkshire (BRK.A, BRK.B) unit previously denied discriminating against borrowers and yesterday said it's disappointed the earlier story is being accepted as fact.
- Offering no comment today, Warren Buffett has in the past made "no apologies whatsoever" about Clayton's "exemplary" lending.
- Meanwhile, back at the home office, Berkshire's 13.7% decline Y/Y has left the stock within shouting distance (about 5%) of the 1.2x book value at which The Oracle has said he would be a happy repurchaser of company shares.
Mon, Jan. 11, 6:57 PM
- Railroad cargo in the U.S. dropped the most in six years in 2015 and the new year's outlook - for the industry, as well as the U.S. economy - is troubling, according to a new report from Bank of America.
- "Rail data may be signaling a warning for the broader economy," BofA says, noting that carloads have declined more than 5% Y/Y in each of the past 11 weeks, and "the current period of substantial and sustained weakness, including last week’s -10.1% decline, has not occurred since 2009."
- BofA says its analysis of the past 30 years shows all such steep declines in rail carloads preceded or were accompanied by an economic slowdown.
- Much of the decline is easily traced to the sharp drop in the amount of oil hauled on U.S. railways as refineries swallow more foreign supplies in the face of falling domestic crude output; Genscape says rail deliveries to U.S. Atlantic coast terminals continued to drop to the end of the year and the spot market for crude delivered by rail from North Dakota’s Bakken region “is at a near standstill.”
- But the BofA team thinks the slowdown is spreading to more consumer-oriented segments, citing a 1.7% Q4 Y/Y drop in intermodal carloads typically related to consumer goods after rising 1% in Q1 2015 and 3.6% in Q2.
- Relevant tickers: UNP, CSX, KSU, NSC, CP, CNI, GWR, BRK.A, BRK.B
Mon, Jan. 11, 6:21 PM
- Phillips 66 (NYSE:PSX) was one of today's stronger oil and gas stocks following the disclosure that Berkshire Hathaway (BRK.A, BRK.B) had added to its stake in the refiner and now owns nearly 12% of the stock.
- BRK said it bought more than 759K PSX shares last Wednesday, and now owns 62.3M shares.
- BRK disclosed a $4.5B stake in August and increased its position the following month, then halted purchases until last week, when it added stock for less than $80/share.
Wed, Jan. 6, 7:30 AM
- The European Commission has approved Berkshire Hathaway's (BRK.A; BRK.B) planned $32.3B purchase of Precision Castparts (NYSE:PCP).
- The Commission said in a statement that the proposed acquisition would not raise competition concerns given the absence of horizontal overlaps and the limited vertical relationships between the activities of the two companies.
Dec. 30, 2015, 2:07 AM
- The Oracle of Omaha is headed for his worst year relative to the rest of the U.S. stock market since 2009, with shares in Berkshire Hathaway (BRK.A, BRK.B) down 11% with just two more trading sessions to go.
- What's been eating at the stock? While the company doesn't have oil and gas subsidiaries, its railroad business transports oil, coal and agricultural products, and its manufacturing arm sells products to the shrinking oil industry.
- Berkshire has also been hit by big declines in two of its largest investments: American Express (-24%) and IBM (-13%) YTD.
Dec. 11, 2015, 4:45 PM
- Select railroad stocks were an island in the storm today after Bloomberg reported that Berkshire Hathaway's BNSF Railway (BRK.A, BRK.B) is considering making a competing bid for Norfolk Southern (NYSE:NSC).
- While BNSF Executive Chairman Matt Rose does not favor more North American rail mergers, he tells Bloomberg the company would not sit on the sidelines in any fresh dealmaking: “If there is consolidation to be had, we would participate as well.”
- Rose’s remarks raise the prospect of another suitor for NSC, which already has turned down Canadian Pacific (NYSE:CP); CSX, NSC’s larger rival in the eastern U.S., would be “very much in play” if CP succeeded with its effort, Rose says, noting that “we’ve never in this industry just done one merger" at a time.
- In today's trade: NSC +2%, CP -2%, CSX +4.1%, UNP -0.2%, KSU -0.1%, CNI -2.1%.
Dec. 11, 2015, 10:30 AM
- Berkshire's (BRK.A, BRK.B) Berkshire Hathaway Direct Insurance Co. - having won a A++ rating from A.M. Best - plans to sell insurance directly to businesses over the Web. The operation will initially focus on workers' comp and business owners' package policies.
- Souring on reisurance because of current weak pricing, Warren Buffett a couple of years ago poached a team from AIG to underwrite large specialty risks for businesses, and earlier this year promised to begin selling insurance over the Internet to mid-size companies.
- Berkshire, of course, already has a bit of experience selling direct thanks to Geico.
Nov. 27, 2015, 11:31 AM
- Warren Buffett in 2008 famously made a $1M wager with hedge fund Protege Partners that the S&P 500 would outperform a basket of hedge funds (net of fees) for the 10-year period beginning on Jan. 1, 2008 - a bet The Oracle is well on his way to winning.
- A fan of Buffett (BRK.A, BRK.B) and an investor alongside him for as long as he can remember, Seeking Alpha contributor Chris DeMuth suggests the problem with the bet (at least for Protege) was fund selection. He proposes a new bet of $1M with Buffett that his Rangeley Capital outperforms the S&P 500 over the 10-year period starting on Jan. 1, 2016.
Berkshire Hathaway, Inc. engages in diverse business activities including property and casualty insurance and reinsurance, utilities and energy, freight rail transportation, finance, manufacturing, retailing and services. Its insurance and reinsurance business activities are conducted through... More
Industry: Property & Casualty Insurance
Country: United States
Other News & PR