Will Berkshire Hathaway be a must-have value buy?! ()

The proportion of Berkshire Hathaway (NASDAQ:AAPL) could always have certain must-have assets. Warren Buffett’s conglomerate has historically outperformed the market very significantly. The average return is still over 20% per year.

Perhaps the overall package has become a little less dynamic. However, Warren Buffett is investing again, which may bode well in the medium and long term. But whether that also makes Berkshire Hathaway shares a must-have should be carefully considered.

In any case, the fundamental valuation should also play a not entirely insignificant role. Perhaps it is now on its way to a value must-have. Let’s take a closer look.

Berkshire Hathaway: Value Must Have?

At the end of the day, of course, Berkshire Hathaway’s valuation is always backwards. Nevertheless, book value per stock and price-to-book ratio remain the metric the Oracle of Omaha swears by. If we now form a quotient, the evaluation measure is already quite moderate.

Warren Buffett conglomerate stock is currently trading at $415,222. Don’t worry: this is the A share. As of the last year of 2021, the book value per share was $375,309 according to data from marketscreener.com. This means that we are currently getting a price-to-book ratio of about 1.1 based on these metrics and the A share.

Of course, context is extremely important. Berkshire Hathaway has changed in 2022. Among other things, the stock in Apple is worth less (at least in the short term due to the volatility of the stock market). Overall, we find a market that is proving very unstable. Nevertheless, we must not forget that stocks such as Coca-Cola, Bank of America and oil stocks performed very solidly. In this regard, it is still interesting to see what book value per share we can ultimately decide for 2022.

Although that is secondary to Berkshire Hathaway’s long-term outlook. In any case, what I am sure of is that the Buffett conglomerate tends to be very reasonably priced by these metrics. Since this share has also lost market value, the value profile now becomes significantly more attractive for investors with a long-term orientation.

Quality and timeless returns!

At the end of the day, Berkshire Hathaway stock is all about quality. The affiliated companies, the Big 4 and the listed portfolio form an overall mix that should continue to provide solid returns, strong cash flow and flexibility for further investments in the coming years and decades. Volatile phases are sometimes part of it as well.

But if you strike during volatile phases and at a more favorable valuation, such as a price-to-book ratio of around 1.1, you could have made a smart, long-term oriented decision. A lower price increases the return potential. Warren Buffett’s investment now is a bonus that may also prove to be a catalyst.

The article Will Berkshire Hathaway Become the Must-Have Value Bargain?! first appeared on The Motley Fool Germany.

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Vincent owns shares in Berkshire Hathaway. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: short January 2023 $200 put on Berkshire Hathaway (B shares), short January 2023 $265 call on Berkshire Hathaway (B shares) and long January 2023 $200 call on Berkshire Hathaway (B shares).

Motley Fool Germany 2022

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