Berkshire Hathaway, the conglomerate headed by Warren Buffet and Charlie Munger released their Q4 and Annual Results on 25th Febuary.
Berkshire Hathaway is an extremely diversified company. They own $334 Billion in stocks. Some examples are they own 5.8% of $Apple(AAPL)$ , 11.9% of Bank of America, 20.4% of American Express, 9.2% of $Coca-Cola(KO)$ and so many more. Besides, their own operating businesses consist of Insurance, Utilities, Railroad and Manufacturing. Overall, Berkshire is way more diversified that any index fund and is a stock to weather any form of economic situation.
Berkshire Hathaway has interest in every part of the US economy, and is used as a gouge on how the economy is doing as whole. US has been raising interest rates, and the economy is currently in a recession, however Berkshire remains strong and undefeated.
Here are some of the happenings:
●Berkshire Cash Hoard is currently at $128.59 Billion, up from $109 B in Q3
●Berkshire has 333.92 Billion in stock investment. Both cash and stocks represent 68% of Berkshires Market Cap at $672 billion.
●Operating Earnings of Berkshire rose to all time high of $30.78 Billion, up 12% from 2021.
●Free cash Flow for 2022 is $21.76 Billion.
●Berkshire bought back $8 Billion worth of Shares, representing 1.2% of their outstanding shares. Warren also specifically mentioned that people who say "all repurchases are harmful to shareholders or the country or particularly benefit the CEO" they are economically illiterate or a silver-tongued demagogue.
●Warren specifically mentioned that Berkshire will continue to hold a boatload of cash, US treasury Bills and alot of businesses.
The 2022 result is extremely impressive seeing how the US is in a recession but Berkshire continues to do really well. Based on their operating earnings and current balance sheet cash and investment amount, we are able to calculate a new intrinsic value. Based on a conversative 2% growth rate for the next 10 years, a discount rate of 10% and a terminal multiple of 15, Berkshire is worth $904.51 billion. With the current trading price of $672 Billion, Berkshire Hathaway is currently trading at a a discount of 34.6%. Berkshire is extremely undervalued currently and has a Buy consensus from many analyst.
With their diversified stock portfolio across all sector, top performance earnings, and their constant reinvestment, I believe everyone should have this company as the core of their portfolio. Berkshire has outperform since 1965 with a CAGR rate of 19.8% vs S&P500's 9.9%, and I believe it will continously outperform throughout the next decade.
Are you guys buying $Berkshire Hathaway(BRK.A)$ $Berkshire Hathaway(BRK.B)$ ? Let me know!
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