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.)