Warren Buffett has certainly taken his knocks over the past couple of years.
Berkshire Hathaway's (NYSE: BRK-A ) investment portfolio has gotten bumped around a bit, thanks to stocks like Bank of America and ConocoPhillips (NYSE: COP ) . Critics also voiced considerable concern over the major investments that Buffett made in Goldman Sachs (NYSE: GS ) and General Electric (NYSE: GE ) . And then there's the whole matter of the derivatives contracts to which Berkshire is party.
But now the tide seems to be turning. Second-quarter operating earnings at Berkshire were still down from last year, but the derivatives contracts have made a nice turnaround, and the performance of some of Buffett's recent investments -- Goldman in particular -- have people thinking that maybe he hasn't lost his mind after all.
Nearly 3,000 members of The Motley Fool's CAPS community have weighed in with their thoughts on Berkshire Hathaway, and the stock has landed a perfect five-star rating. Of those thousands of members, though, none has managed to do better with Berkshire than Jordrok, who put a thumb up on Berkshire way back in August 2006. That call has since scored 57 points, as Berkshire handily outperformed the S&P 500 index.
Jordrok is one of CAPS' All-Stars -- players with a rating of 80 or greater -- and has managed a stock-picking accuracy of 60% while racking up nearly 600 points. Berkshire Hathaway isn't this player's only great call. Here's a look at a few other prescient picks:
|
Company
|
Date Picked
|
Date Ended
|
Call
|
Points
|
CAPS Rating
(Out of 5)
|
|
D.R. Horton
|
2/12/07
|
10/16/07
|
Underperform
|
59
|
*
|
|
Jos. A. Bank
|
11/13/08
|
3/19/09
|
Outperform
|
52
|
***
|
|
First Marblehead (NYSE: FMD )
|
8/30/06
|
1/26/07
|
Outperform
|
43
|
****
|
Data from CAPS.
So what is this investor looking at these days? Here are a few of the most recent calls Jordrok has made on CAPS:
|
Company
|
Date Picked
|
Call
|
CAPS Rating
(Out of 5)
|
|
Buckle
|
8/11/09
|
Outperform
|
***
|
|
UnitedHealth Group (NYSE: UNH )
|
7/24/09
|
Outperform
|
*****
|
|
China Mobile (NYSE: CHL )
|
7/24/09
|
Outperform
|
*****
|
Data from CAPS.
While not all of these picks may pan out, they could be a good place to start further research. I decided to take a closer look at Motley Fool Stock Advisor favorite UnitedHealth.
The debate is on
The battle lines have been drawn, and the two sides are staring each other down. In the blue trunks, we have the health-care reformers, who are intent on dragging the current system into the toolshed and hopefully emerging with something better. And in the red trunks, we have the reform-fighters, focused on stopping further government incursion into the health-care system. Mills Lane can ask for a clean fight all he wants, but I don't know that we're going to get it.
So how will this all shake out for insurance companies like UnitedHealth? To some extent, they've been able to breathe easier, since President Obama has made it clear that a one-payer system -- in which the government pays for all health-care expenses -- is not on his menu of options.
However, reform would put new pressures on insurers. Proposed measures include restricting insurers' ability to deny coverage based on existing illnesses, and the creation of a government-sponsored health-care plan that would compete with private insurers. While UnitedHealth and other insurers should be able to run profitably even with measures like these in place, those profits may not be as juicy as investors are used to.
CAPS members weigh in
The CAPS community has shown a range of opinions when it comes to UnitedHealth.
In recent ratings, only a handful of members have thought that health-care reforms are worrisome enough to rate the stock an underperformer. Of the UnitedHealth fans, some are bullish because they believe a delay in rolling out the reforms will be a near-term positive for the stock. Others, such as CAPS All-Star pickumnow, think that reform could actually help major insurers:
The health care debate [is] moving in favor of the industry. The bigs will get bigger. United is underpriced and well positioned to gain in the future.
A third group has focused primarily on the underlying quality of UnitedHealth's business and is expecting that more clarity around the government's actions will make investors more comfortable with the stock again. One of CAPS top-performing members, TSIF, shared this back in May:
Health care is not exactly thriving under economic/governmental uncertainty. ... Decent margins, exceptional cash flow, relatively low forward P/E. If the government stays out of nationalizing medicare and medicaid and UnitedHealth continues to shine in it's management and technology services then it should do well even if the recession lingers.
But here's the important question: What's your take? Will UnitedHealth survive -- or possibly even benefit from – health-care reforms? Get in the action by clicking over to CAPS. It's absolutely free and already has more than 135,000 stock pickers chipping in to find the best stocks out there.
Related Foolishness:
RSS Headlines
Fool UK