Considering shares of Berkshire Hathaway are down about 10% year to date, is it still a good idea to bet on Buffet?
At first glance you might think it's not.
In the January-to-March period, Berkshire, which runs close to 80 businesses, reported its first quarterly loss in over 5 years, hurt by losses on derivative contracts, a big investment in the oil company ConocoPhillips and the weakening economy.
However first glances can be deceiving. Take comments from Keefe Bruyette & Woods analyst Cliff Gallant.
He says, with $25 billion in cash, low debt levels and low leverage ratios, billionaire investor Warren Buffett's Berkshire has rather attractive long term growth prospects.
He’s impressed with the strength of Berkshire’s balance sheet and says --considering that some companies desperately needs cash right now -- investment opportunities may be better than they have been in years for Berkshire.
Gallant initiated coverage of Berkshire Hathaway with an "outperform" rating and a price target of $107,000 citing attractive long term growth prospects.
"Paraphrasing a Buffet analogy, the tide has gone out and Berkshire is not just wearing shorts, but a belt and suspenders in the form of financial strength and quality operating businesses," he says.
Looks like the Oracle from Omaha found a new fan!
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Trader disclosure: On June 29th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (C), (GS), (BTU), (AGU), (INTC), (MSFT), (NUE); Seymour Owns (AA), (AAPL), (BAC), (BX), (EEM), (FXI), (INFY); Seymour's Firm Owns (QCOM), (NOK), (EEM); Terranova Owns (TER), (RIMM), (MSFT), (XBI), (MS), (ABT); Finerman Owns (RIG), (ELX); Finerman's Firm Own (NOK), (PBR), (RIG), (TBT), (ELX), (HPQ); Finerman's Firm Owns (BAC) Preferred; Finerman Owns (BAC) Preferred; Finerman's Firm Owns (WFC) Preferred; Finerman Owns (WFC) Preferred; Finerman's Firm Is Short (IJR), (IYR), (MDX), (SPY), (USO)
For Cliff Gallant:
KBW either expects to receive or intends to seek compensation for investment banking from(BRK/A)
KBW either expects to receive or intends to seek compensation for investment banking services from The Travelers Companies,
Cliff Gallant or members of Cliff Gallant's household currently hold a position in (BRK/A)