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Berkshire Being Added to S&P 500

In breaking news the Fast Money desk learns that Berkshire Hathaway B-shares will be replacing Burlington Northern in the S&P 500.

What’s the trade?

I think the stock could run considerably so I’d hang on, says Whitney Tilson of T2. I peg intrinsic value to the Berkshire A-shares around $140,000, he says. There’s a very large gap between where it’s trading now and intrinsic value.

With all the buying index funds will now have to do, I expect to see share price move up quite a bit, he adds.

*To calculate Tilson’s intrinsic value for Berkshire B-shares take Tilson’s target and divide by 1500.

Tilson had a lot of other insights on Berkshire Hathaway when he visited with us on Janaury 19th. Click here for that interview.


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Trader disclosure: On January 26th, 2010, 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 (AGU), (C), (INTC), (MSFT), (NUE), (BTU); Najarian Owns (AAPL) Call Spread; Najarian Owns (CTXS) Call Spread; Najarian Owns (GS) Call Spread; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (PFE); Najarian Owns (XLF) Calls; Finerman's Firm Is Short (IJR), (MDY), (SPY), (UNG), (USO), (IWM); Finerman Owns (AAPL); Finerman's Firm Owns (BAC) Leap, (BAC); Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (KFT); Finerman's Firm Owns (MSFT); Finerman's Firm Owns (WFC) Preferred; Finerman's Firm Owns (WMT); Terranova Owns (BAC), (JPM), (XOM), (MMM), (FCX), (EMC), (AAPL), (DELL), (MSFT), (QCOM); Terranova Is Short (CMA), (ESS), (CAL); Terranova Is Long Copper Backwardation Futures; Terranova Is Long March 2010 Copper, Is Short July 2010 Copper

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