No. of Recommendations: 11
I found this interesting, not for the analysis (1.5x book is cheaper than it was, Berkshire has underperformed lately), but simply because I didn't realize Edward Jones did stock analysis like this. EJ are known for selling high-fee mutual funds to folks who don't know any better. If their "advisors" tell folks to buy Berkshire instead they won't get those sweet bonuses.
Berkshire Stock Gets Upgraded. Here’s Why the Analyst Says Buy.
https://www.barrons.com/articles/berkshire-stock-b...Edward Jones upgraded Berkshire Hathaway
BRK.B stock to a Buy from a Hold, citing the stock’s underperformance in recent months and its strong balance sheet with almost $350 billion in cash.
...
“We believe that the current share price represents an attractive entry point for long-term investors. Berkshire’s revenue and earnings benefit from a diverse group of operating companies, “Shanahan wrote.
“In addition, Berkshire holds almost $350 billion in cash on the balance sheet, which could prove to be a strong earnings catalyst, should the company invest heavily in operating companies, individual stocks and/or Berkshire’s own shares.”
When Berkshire buys its own shares, then it'll be an attractive entry point for long-term investors.
No. of Recommendations: 4
"I found this interesting, not for the analysis"
if this passes for Analysis, I pray for their investors.
No. of Recommendations: 5
“We believe that the current share price represents an attractive entry point for long-term investors. Berkshire’s revenue and earnings benefit from a diverse group of operating companies, “Shanahan wrote.
“In addition, Berkshire holds almost $350 billion in cash on the balance sheet, which could prove to be a strong earnings catalyst, should the company invest heavily in operating companies, individual stocks and/or Berkshire’s own shares.”
All that seems pretty fair to me.
The current share price is unlikely to represent an attractive entry point for short-term investors, but if you are patient (i.e. a long-term investor), $496 will probably end up being a perfectly good price to buy at. And the cash could be a strong catalyst, if Berkshireends up being able to buy something with it. For the moment, there are probably no big operatiing companies available at a price that makes sense, either as full acquisitions or as individual stocks, and Berkshire has held off repurchasing shares since Q1 2024, i.e. when B-share prices were between $365 and $430. I think Berkshire is unlikely to repurchase shares at $496. So none of the conditions EJ refers to as catalysts can be said to apply right now, but it is reasonable to think there's a good chance share prices of a lot of things, including Berkshire, will be a fair bit lower in the next year or two.
Given that optionality, owning Berkshire shares now is not crazy. If the price goes a little lower (say $450), I would be a buyer of shares, and if the price goes a little higher (say $525), I would be selling more puts, the selling of which has been a reasonably profitable consolation for me for the last couple of years, in the absence of share ownership north of $425.
DTB
No. of Recommendations: 2
If the price goes a little lower (say $450), I would be a buyer of shares, and if the price goes a little higher (say $525), I would be selling more puts.
Did you mean you'd sell calls? Doesn't make much sense to say that the stock is perhaps overpriced now, but you wouldn't sell puts until it's definitely overpriced (and your premium is lower for the same strike).
