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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 1
Back of the envelope taking an average of 5 dollars EPS and 10 % earnings growth over the next 10 years and a terminal multiple of 20 equates to $259 per share which equates to a c7%pa return from current purchase price at c$130. I'm looking at a purchase price of c$85 or below to achieve desired 12%, fair?
No. of Recommendations: 4
It seems unlikely that you will see that price if that is what you are holding out for. They have fundamentally been a great business with strong growth, successful expansion into new areas, and sound fundamentals. Many would consider even the current valuation a good entry point.
Maybe one issue is you are taking $5 of EPS as a starting point when they are probably at least $6 on a run rate basis?
Another is that the growth rate maybe needs to be more than 10% if $5 is a starting point. My view would be that $5 probably represents an underperforming year for the enterprise as it stands today, and one that could be grown quicker in initial return to normal.
10 years is long enough that many things could happen, both good and bad. But waiting for a c$85 entry point could mean that Apple may never be in your portfolio.
No. of Recommendations: 2
Many said that to me about Goog when I suggested an $1800 buy price and said "it wouldn't drop below 2100-2300" but I picked a whole bunch up last Thursday @ $85, the old $1700. I'd been heavily buying Prosus between 45 and 60 Euros and had a nice 55% gain so sold some. I still have Prosus but have trimmed my position.
I do like Apple but would rather buy google as at current prices google represents c14% compound per annum for 10 yrs rather than Apples c7%. Just my opinion.
No. of Recommendations: 2
To add, Berkshire is my largest holding so indirectly I have lots of apple anyway. It's a price $85 that would take my fancy for a direct position, I've learnt to not just buy the name at any price but the right price, or there abouts! I also have no desire to own something just because of the brand-name. I'm non emotional, it's about return.
No. of Recommendations: 1
I'm the same way. Certainly I didn't post to promote that you should buy Apple. I am just saying its great that you have a price in mind, but its a low price. Maybe the Goog analogy applies, but I am personally doubtful. But hey we all have our targets.
