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After Earnings, Is Berkshire Hathaway Stock a Buy, a Sell, or Fairly Valued?

With strong insurance underwriting and increased T-Bill investment, here’s what we think of Berkshire stock.

Read in Morningstar: https://stocks.apple.com/AMkgv6-UQRMOdnW6EX91hQg

By Gregg Warren. Excerpt:

“…With its 2-star rating, we believe Berkshire Hathaway’s Class B stock is overvalued compared with our long-term fair value estimate of $467 per share, an increase from $427 per share, which reflects changes in our forecasts for the company’s operating businesses and insurance investment portfolio.

Our new fair value estimate is equivalent to 1.44 and 1.40 times our estimates for Berkshire’s book value per share, respectively, at the end of 2025 and 2026. For some perspective, during the past five (10) years the shares have traded at an average of 1.45 (1.47) times trailing calendar year-end book value per share...”

Morningstar's fair value estimate of $467/B-share ($700,000/A-share) corresponds to 1.55x Dec 31 book value per share, which is consistent with Berkshire's stock repurchases. Today's price corresponds to 1.64x BV, or about 6% above that fair value estimate. I would go with Berkshire's stock repurchases and estimate IV at about 1.55x BV. Just FWIW.

It's nice to see B book value go above 300 for the first time.

Also, as we know, there have been no repurchases for the last 9 months. Note to self, when Buffett restarts repurchasing, don't overthink, just shut up and buy.

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As of 2024 yearend:

Shareholders' equity:  		649,368 million
Class A outstanding shares:  	1,438,223

BRKA book value:                (649,368 * 1,000,000)/(1,438,223) = 451,507
BRKB book value:                451,507/1,500 = 300.98

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		Average
		Repurchase	Quarterend	
                Price		BV		Ratio

December	0.00		300.98		N/A
November	0.00		300.98		N/A
October		0.00		300.98		N/A
September	0.00		291.72		N/A
August		0.00		291.72		N/A
July		0.00		291.72		N/A
June		0.00		282.92		N/A
May		417.79		282.92		1.48
April		413.87		282.92		1.46
March		415.47		265.08		1.57
February	414.12		265.08		1.56
January		370.08		265.08		1.40
December	360.71		259.58		1.39
November	355.27		259.58		1.37
October		348.50		259.58		1.34
September	366.42		242.28		1.51
August		361.16		242.28		1.49
July		347.62		242.28		1.43
June		335.55		248.64		1.35
May		329.00		248.64		1.32
April		308.57		248.64		1.24
March		308.51		231.95		1.33
February	306.07		231.95		1.32
January		312.92		231.95		1.35

Nice table. Adding a column of how much was spent on the repurchase could be useful.

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Berkshire Hathaway FAQ

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