Yahoo Finance Is It Too Late To Buy Berkshire Hathaway Inc (NYSE:BRK.A)?
Today we’re going to take a look at the well-established Berkshire Hathaway Inc (NYSE:BRK.A). The company’s stock saw its share price hover around a small range of $285000 to $307600 over the last few weeks. But is this actually reflective of the share value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Berkshire Hathaway’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Berkshire Hathaway
What’s the opportunity in Berkshire Hathaway?
Berkshire Hathaway appears to be overvalued by 60.22% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$286,541 on the market compared to my intrinsic value of $178837.81. Not the best news for investors looking to buy! Another thing to keep in mind is that Berkshire Hathaway’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What kind of growth will Berkshire Hathaway generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, with an extremely negative double-digit change in profit expected next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Berkshire Hathaway, at least in the near future.
What this means for you:
Are you a shareholder? If you believe BRK.A should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on BRK.A for a while, now may not be the best time to enter into the stock. Price climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Berkshire Hathaway. You can find everything you need to know about Berkshire Hathaway in the latest infographic research report. If you are no longer interested in Berkshire Hathaway, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
