- Warren Buffett's Berkshire Hathaway Adds GM to Holdings
- Lunch With Warren Buffett: $2 Million-Plus?
- Warren Buffett: Lady Di Called Bill Clinton 'Sexiest Man Alive'
- CNBC Transcript: Warren Buffett on Squawk Box
- Warren Buffett: We're Buying Two US Stocks
- Warren Buffett to CNBC: Mark Zuckerberg Right to Keep Tight Control Over Facebook
- Warren Buffett: Apple and Google Too Risky For Me
- Warren Buffett Reassures Shareholders on Cancer and Succession
- Warren Buffett Recently Considered $22 Billion Acquisition
- Warren Buffett 'Very Comfortable' With Berkshire Stock Buybacks
RSS FEED
MOST SHARED
- JPMorgan Trading Loss: Did Regulators Miss the Risk?
- RIM May Cut at Least 2,000 Jobs in Restructuring: Report
- Marc Faber: 100% Chance of Global Recession
- How Nasdaq Lost Control of Facebook IPO, by the Minute
- Bacon Tourism: From the Davos of Bacon to Bacon Mecca
- Heard in More US States: See You in Tax Court!
- 5 Spots Where the Dollar Buys a Great Vacation
- What College Tuition Will Look Like in 18 Years
- A New Look at the ‘New Poor’
- Six Pack: Beer Buzz of the Week
- Greek Exit Could Trigger 50% Fall in Euro Stocks: Analyst
- Under Pressure, FHA Skews to Wealthier Home Buyers
- Big Stock Upside for Hudson City Deal: Analyst
- 5 High-Yield Stocks Ready to Boost Dividends
- Yoshikami: Four Things You Need to Know About Gold Now
- Steinbock: The Euro Zone Endgame Begins
- Option Bulls Take Another Shot on Idenix
- How Nasdaq Lost Control of Facebook IPO, by the Minute
- Week Ahead: Europe Has Wall Street Bull on Short Leash
- Pro-Bailout Greeks Regain Lead in Polls Before Vote
- Citigroup Lost $20 Million on Facebook IPO Trades
- JPMorgan to Shake Up Risk Team After Big Loss: Report
- RIM May Cut at Least 2,000 Jobs in Restructuring: Report
- EU Finalizes Bank Reforms; Shifts Burden to Bondholders
- Spain's Bankia Eyes Stake Sales After Record Bailout
- EU Set to Launch Action Against China Over Telecom Aid
Warren Buffett Watch
Text Size 
Barron's: Berkshire Hathaway's Stock Price Plunge Finally Makes It "Cheap" Again
Barron's put the big, bold headline "Sell Buffett" on its cover late last December. At the time, Warren Buffett's Berkshire Hathaway had just closed at $143,000. The financial weekly predicted the stock would fall. It did.
Since then, Berkshire has dropped as much as 48 percent, sinking to $74,100 during Thursday's session before rebounding by 16 percent on Friday to close at $90,000.
 |
In Finally, Berkshire Looks Undervalued, Senior Editor Andrew Bary writes that Berkshire's long-term put options on $37 billion of equity indexes "looks like a rare mistake by" Buffett, but "Wall Street seems to have overpunished the stock for the bet."
And, he notes that Berkshire has a triple-A credit rating and "loads of earnings power" thanks to its many businesses. "If the stock market rallies in 2009, Berkshire will probably see record profits" with help from "improving conditions" for its insurance units and the 10 percent a year it will get from investing a total of $8 billion in General Electric and Goldman Sachs.
Bary writes that Berkshire's stock price has been linked to its book value in the past. Barron's estimates it is currently around $66,000 a share. That means the stock is now trading at 1.4 times that estimated book value, "versus an average of around 1.5 in the past decade -- and current book is depressed. If the stock market rallies 25 percent in the next year, the stock could hit $110,000, or 1.4 times potential year-end '09 book value of $80,000 a share."
And if stocks don't rebound, Berkshire's "downside seems limited" due to its very strong balance sheet.
Current Berkshire stock prices:
Class A: [US;BRK.A
Loading...
()
]
Class B: [US;BRK.B
Loading...
()
]
General Electric: [GE
Loading...
()
]
Goldman Sachs: [GS
Loading...
()
]
Questions? Comments? Email me at
- Berkshire Hathaway Bounces Back By 16% For Best Day In Decades (November 21)
- Berkshire Hathaway Subsidiary Keeps Coachmen Alive By Acquiring RV Business (November 21)
- USG Shares Soar On Warren Buffett's "Expression of Confidence" (November 21)
- Warren Buffett on Market Meltdown: It's Happened Before And It's Been Even Worse (November 21)
- Berkshire Hathaway Down Almost 50% From All-Time High As Stock Sinks Again (November 21)
- Berkshire Hathaway Plunges 12% For Worst Day Since 1987's Black Monday (November 19)
- A Goldman Opportunity: How Average Investors Can "Out-Buffett" Warren Buffett (November 19)
- Buffett's Berkshire Gets A Billion In Beer Bucks (November 18)
- Berkshire Hathaway Shares Close Below $100,000 For First Time In Two Years (November 17)
Data is a real-time snapshot *Data is delayed at least 15 minutes
