Warren Buffett Watch
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
- Amended Berkshire Hathaway Filing Indicates No Secret Stock Stakes at End of Q3
- Buffett's Wealth and Fame Hasn't Helped 'Warren' As a Name
- CNBC VIDEO: Warren Buffett & Bill Gates 'Walk & Talk' at Columbia University
- Warren Buffett to CNBC: Curbing Fed's Independence Could Lead to 'Mischief'
- Warren Buffett to Co-Chair Goldman Sachs Program to Help Small Businesses
- Warren Buffett: 'Reasonable Return is Good Enough' for Long-Haul Railroad Ride
- Warren Buffett's Berkshire Hathaway Almost Doubles Wal-Mart Holdings During Summer
- Warren Buffett's Berkshire Portfolio Snapshot Coming Later Today
- Warren Buffett to CNBC: 'I Haven't Bought American Express In Years'
RSS FEED
MOST SHARED
- US Shoppers Spent Less Over Black Friday: NRF
- South Korea Sees Exports Bouncing, but Risks Remain
- Japan Won't Intervene to Weaken Yen: Finance Minister
- Fed Audit Would Hurt Economic Prospects: Bernanke
- Japan Industrial Output Edges Up But Yen May Weigh
- Tiger Woods Wants to Protect Family Privacy: Agent
- Topless Business Is Taking Off
- Portfolio Prep for Next Week: 'Don't Get Crazy'
- U.S. Stocks Fall on Dubai Worries
- Black Friday at Best Buy
- Strategists on Dubai: Avoid 'Rash Moves' Now
- Longer Lines, Fuller Carts This Black Friday
- Dubai Stock Market Fear Has 'Legs': Dennis Gartman
- Obama's Emission Reduction Pledge Paints Future for Autos
- Is Super Bowl Halftime Act Too Old?
- Surprising Options Trades in TiVo Shares
- US Shoppers Spent Less Over Black Friday: NRF
- UAE Central Bank Stands by Banks Amid Dubai Crisis
- UAE Markets Seen Limit Down on Monday Open
- Banks With The Biggest Exposure to The UAE
- Dubai's Debt Woes Signal New Era for Creditors
- A Weak IPO Debut for Las Vegas Sands' Macau Unit
- US Treasury Wants Banks to Do More to Ease Mortgages
- Tiger Woods Accepts Full Blame for Car Crash
- Next Week: Cash In Now Or Wait For A Santa Rally?
Text Size 
Executive Producer
 |
Barron's is taking a strong bullish stand on shares of Warren Buffett's Berkshire Hathaway, calling them a "bargain" in the mid-$80Ks.
The Dow Jones weekly says the stock is trading at "just 1.2 times our estimate of current book value of $72,000 a share," well below its average over the past decade of 1.6 to 1.7 times book value.
"The current price-to-book ratio is near the low reached in early 2000, when Berkshire's stock bottomed at about $40,000."
Barron's Andrew Bary writes that a price target of $110,000 in the next year "doesn't seem outlandish" as it would translate into 1.4 times $80,000, the magazine's estimate of book value in 12 months.
Berkshire's current 1.2 price/book ratio is even lower than the 1.4 level it was at last November, when Bary called the stock "cheap." (That was almost a year after Barron's big 'Sell Buffett' cover story, in which it correctly predicted Berkshire shares would fall from the $140Ks.)
 |
Barron's notes that Buffett has grabbed opportunities created by the financial crisis to make over $20 billion of "promising investments" in Goldman Sachs [GS
Loading...
()
], General Electric [GE
Loading...
()
], and Swiss Re [SWCEY
Loading...
()
].
But, "Buffett's investment coups haven't registered on Wall Street," with the stock failing to match the stock market's overall rally since March.
Barron's argues that even if the stock market plunges again this year, Berkshire's downside seems "limited due to its low price/book ratio and the company's earnings power."
Bary's bottom line:
"Some think Berkshire's best days are over and there isn't much money to be made in the stock ... Yet the company looks stronger than ever, due to its promising portfolio and some top-flight businesses. Investors could now buy that package for a low premium to book value and get the talents of Buffett, who continues to demonstrate his incomparable investment skills."
The full Barron's story is only available online to paid subscribers.
Current Berkshire stock prices:
Class A: [US;BRK.A
Loading...
()
]
Class B: [US;BRK.B
Loading...
()
]
For more Buffett Watch updates follow alexcrippen on Twitter.
Email comments to
- Warren Buffett's Berkshire Hathaway Retreats from "Risky Business" - WSJ (July 13)
- Warren Buffett's Top Three Investment Rules for the Average American (July 10)
- Warren Buffett's Complete Sun Valley CNBC Interview - Transcript and Video (July 9)
- Warren Buffett Tells CNBC Consumer Sales Remain "Very, Very Soft" (July 9)
- Warren Buffett: Economy Needs Another Dose of Viagra (July 9)
- Canada's Salida Capital Revealed As Winning $1.68M Bidder for Warren Buffett Lunch (July 8)
- Warren Buffett Lunch Winner: I Won't Profit From Stock Tip Windfall (July 6)
Data is a real-time snapshot *Data is delayed at least 15 minutes