Invite ye felawes and frendes desirous in gold to enter the gates of Shrewd'm, for they will thanke ye later.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 0
Greetings,
I think I am coming up with the wrong number for book value which is embarrassing. Both GuruFocus and Ycharts disagree with me. I am using page 4 shareholder's equity without minority interests divided by shares out. Are others also coming up with 248.7ish per b share? That's not what I have. Have you seen a number in one of the articles? The only one I saw was Barrons and they had 244 per b share (closer to what I have). Thanks in advance.
DQ
No. of Recommendations: 6
I am using page 4 shareholder's equity without minority interests divided by shares out. Are others also coming up with 248.7ish per b share? That's not what I have. Have you seen a number in one of the articles? The only one I saw was Barrons and they had 244 per b share (closer to what I have).
The trouble with page 4 is that it gives you the average shares in the quarter (2,170,387,690), where we presumably want the exact number on Sep 30. You can get the Sep 30 number on p. 23, Note 19, where they say there were 573,335 A shares and 1,308,316,593 B shares, or 1500*A+B=2,168,319,093 B-equivalents by my calculation.
Using the p.3 number of shareholders equity (without minority interests), i.e. $525,330 million, I get 525330000000/(1500*573335+1308316593)=$242.28
So there's another number to add to the confusion, but that is how I would do it.
DTB
No. of Recommendations: 4
Thanks for the reply. I had $242.04 using the method I mentioned above so close enough to your 242.28. I looked back at Barrons and I had written down $366,000 per A share when they actually wrote $363,000 which is also $242, so all in sync now. Thanks again.
Have a great day,
DQ
No. of Recommendations: 3
On page 2 of the press release it says 1,445,546 Class A are outstanding.
That is a bit of a short cut.
No. of Recommendations: 9
On page 2 of the press release it says 1,445,546 Class A are outstanding.
That is a bit of a short cut.
Yes, thanks for that.
I got 2,168,319,093 B-equivalents, using pages 3 (equity) and 23 (A- and B-shares outstanding)
Multiplying the press release number by 1500, there would be 2,168,319,000 B-shares outstanding. The discrepancy, 93 B-shares, is probably because the press release included no decimal places; 93 B-shares would be an extra 0.062 shares. If we care about the BV per share to the exact cent (and we probably shouldn't), it's probably better to use my B-share number, since it is the number that is consistent with pages 3 and 23 and also the press release. It is very unlikely that the real number of A-shares outstanding is a number without a decimal (that would tend to have a probability of 1/1500), so the B-share number is likely to be more precise. But your shortcut is quicker and satisfactory for any practical purpose.
BTW, I notice there's no mention of book value in the PR, which I guess is consistent with Buffett's warning that it will become less relevant. Here are the blurbs, just after the table giving the details about operating earnings, from the 3Q PRs for the last 7 years:
2017: At September 30, 2017, our book value had increased by 8.9% since yearend 2016 to $187,435 per Class A equivalent share. Insurance float (the net liabilities we assume under insurance contracts) at September 30, 2017 was approximately $113 billion, an increase of approximately $22 billion since yearend 2016.
2018: At September 30, 2018, our book value per Class A equivalent share was $228,712. Insurance float (the net liabilities we assume under insurance contracts) was approximately $118 billion at September 30, 2018, an increase of $4 billion since yearend 2017.
2019: At September 30, 2019, insurance float (the net liabilities we assume under insurance contracts) was approximately $127 billion, an increase of $4 billion since yearend 2018.
2020: Approximately $9 billion was used to repurchase Berkshire shares during the third quarter bringing the nine month total to approximately $16 billion. On September 30, 2020 there were 1,570,636 Class A equivalent shares outstanding. At September 30, 2020, insurance float (the net liabilities we assume under insurance contracts) was approximately $135 billion, an increase of $6 billion since yearend 2019.
2021: Approximately $7.6 billion was used to repurchase Berkshire shares during the third quarter bringing the nine month total to approximately $20.2 billion. On September 30, 2021 there were 1,493,097 Class A equivalent shares outstanding. At September 30, 2021, insurance float (the net liabilities we assume under insurance contracts) was approximately $145 billion, an increase of $7 billion since yearend 2020.
2022: Approximately $1.05 billion was used to repurchase Berkshire shares during the third quarter bringing the nine month total to approximately $5.25 billion. On September 30, 2022 there were 1,466,045 Class A equivalent shares outstanding. At September 30, 2022, insurance float (the net liabilities we assume under insurance contracts) was approximately $150 billion, an increase of $3 billion since yearend 2021.
2023: Approximately $1.1 billion was used to repurchase Berkshire shares during the third quarter bringing the nine month total to approximately $7.0 billion. On September 30, 2023 there were 1,445,546 Class A equivalent shares outstanding. At September 30, 2023, insurance float (the net liabilities we assume under insurance contracts) was approximately $167 billion, an increase of $3 billion since yearend 2022.
It's all admirably concise and relevant, and always in exactly the same format, one of the many things I love about Berkshire. And I love how the float has gone from $113B to $167B in 6 years (6.7%/year.) But still, I miss the book value, which disappeared in 2019, and replaced in 2020 by repurchases, which are themselves what is probably making the book value less relevant...
DTB
No. of Recommendations: 0
Just ran a quick IV value estimate based on book value and it's coming out at $309 a share for me.
242 book x 10% growth for 5 years. 389 x 1.4x book = 545 per share, discount at 12% return I'd want, intrinsic value is $309
No. of Recommendations: 10
"intrinsic value is $309"
lost you there.... you mean the discounted price today you want to buy at to capture the 12% return demanded?
that's not IV. IMO
No. of Recommendations: 0
Makes sense. That is why WEB bought back stock as high as $367.21
No. of Recommendations: 1
If I'm looking for a 12% return annualized ober the next 5 years (which is my base case for seeking a return on any investment nowadays) then that's my intrinsic value.
If your happy with 9.5%pa then the current price is your intrinsic value.
No. of Recommendations: 0
Just calculated the return from 1996 to present (inception or B shares) and it's 10.39%pa for the share price.
Does anyone have the long term growth rate of the book value per share from 1996 to present?
No. of Recommendations: 3
19100 BV for the A in 1996 divide by 1500 for number of B to A. =12.67 per B
12.67 96 to 242 23 over 27 years so book value has increased 11.54% vs share price appreciation of 10.39%
No. of Recommendations: 1
And bv still compounding at ~11% since 2010. Not so bad.
Jeff
No. of Recommendations: 2
"Thus, my estimate of Berkshire's intrinsic value is $381,000 (investments) plus $201,000 (operating businesses), for a total of about $582,000 per A-share or $388 per B-share."
~~~~~~~~~~~~~~~~~~~~~
That from Whitney Tilson's latest estimate of Berkshire's intrinsic value,
https://empirefinancialresearch.com/newsletters/wh...ciao
No. of Recommendations: 1
Last decade 13' 90bv-242bv 23' 10.4%pa exactly the same as the long term share price appreciation since 1996.
No. of Recommendations: 1
