Morningstar Rating

Stock Research and Analysis

by Greggory Warren, CFA

Bulls Say

Book value per share, which is the best proxy for measuring changes in Berkshire's intrinsic value, increased at a compound annual rate of 19.7% from 1965 to 2012, compared with a 9.4% total return for the S&P 500 TR Index.
Berkshire's long-term record has also been fairly consistent, with the company reporting annual declines in book value per share in only two years: 2001 and 2008.
At the end of the third quarter of 2013, Berkshire had $77 billion in float from its insurance operations. The cost of float has been negative for the past decade. Read more 

Bears Say

Given the size of its existing operations, the biggest hurdle facing Berkshire will be its ability to consistently find deals that not only add value but also are large enough to be meaningful.
The other big issue facing the firm is the longevity of chairman and CEO Buffett and managing partner Munger, both of whom are octogenarians.
Berkshire's insurance operations face highly competitive and cyclical markets and occasionally will produce large losses. It also has highly uncertain liabilities, including potential asbestos claims, which could cost more than the firm has stated. Read more 

Management

Warren Buffett has been chairman and CEO of Berkshire Hathaway since 1970. Charlie Munger has served as vice chairman since 1978. Berkshire has two classes of common stock, with Class B shares holding 1/1,500th of the economic rights of Class A shares   Read more 

Profile

Berkshire Hathaway is a holding company with a wide array of subsidiaries engaged in a number of diverse activities. The firm's core business is insurance, run primarily   Read more 

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