Why I Wouldn't Buy Berkshire Hathaway's Portfolio
Summary
- Since my last 'Sell' rating reflecting my view of Berkshire's underperformance vs the S&P 500, Berkshire has underperformed the S&P 500 by 6.49%.
- I am downgrading my rating to a 'Strong Sell' as I am more confident of further underperformance ahead.
- Despite trading at the same valuation as the S&P 500, I believe most of Berkshire Hathaway's business has an underwhelming earnings growth past and future outlook relative to the S&P500.
- Berkshire is also priced the same as the S&P500, but with a worse growth expectation, indicating what I believe is a mispricing and overvaluation of Berkshire's stock.
- The technicals also paint a bearish outlook, suggesting Berkshire would lag the SPY for multiple quarters and years ahead.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.