The decision to allow analyst questions at the meeting is of itself somewhat a landmark in the company’s history. Buffett rarely invites analysts to the meetings, which often draw upwards of 36,000 people.
Stifel, though, said it is the only one of the four sell-side Berskhire analysts not invited to ask questions. Those invited are Jay Gelb of Barclays Capital, Cliff Gallant of Keefe, Bruyette & Woods and Gary Ransom of Dowling & Partners.
In a sarcasm-laced note to clients, analyst Meyer Shields bemoans the Baltimore-based firm’s exclusion. He even said Stifel analysts have been going through the five stages of grief – denial, anger, bargaining, depression and acceptance.
“Denial didn’t last long, and anger also seemed futile, but when we entered the bargaining stage, things started looking up,” Shields wrote. “Since – despite his professed fondness for ‘tough’ questions – Mr. Buffett will evidently bestow this awesome prestige only upon analysts recommending Berkshire’s shares (three scrupulous, intelligent, and insightful fellows, we hasten to add), apparently all we need is a valuation methodology under which we could recommend the shares and, presto – we're on the next boat to Omaha!”
No such valuation appeal can be found, the analyst said, as the company trades in line with its historical correlation to the Standard & Poor’s 500, “so there doesn’t appear to be enough stock-specific upside to balance rising succession concerns.”
The latter statement appeared to be yet another nudge in the ribs to the 81-year-old Buffett, who has been notoriously circumspect about naming someone who will take the helm once he leaves. A move in September to appoint Ted Weschler, 50, to help manage the company’s investment portfolios was seen by some as a sign that Buffett was moving closer to deciding an heir-apparent.
A spokesman at Berkshire-Hathaway did not immediately respond to a request for comment.
Shields, meanwhile, sees Berskshire as a bit rich at 121 percent of book value, “implying limited potential upside.”
“All sarcasm aside, we simply don’t expect Berkshire’s shares to outperform the S&P 500 over the next 12 months,” Shields wrote. “Its below-historical-average multiples apparently stem from both market-wide and company-specific factors rather than stock market inefficiencies, and we reiterate our Hold rating on the shares.”
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