Berkshire Reports; Shares Still Look Cheap

Selling in stocks intensified this afternoon, as the Dow (INDEX: ^DJI  ) and the broader S&P 500 (INDEX: ^GSPC  ) ended the day down roughly 1%.

The micro view
Fun fact: Candy-to-railcar conglomerate Berkshire Hathaway (NYSE: BRK-B  ) is one of only three U.S. companies with a market value over $200 billion that are not in the Dow -- the other two are Apple and Google.

Berkshire reported its third-quarter results after the close today, announcing earnings of $2,272 per Class A share, compared to $1,380 a year ago. However, treat the headline numbers with caution; for example, the prior year quarter included $1.587 billion in (temporary) derivatives losses, compared to just $76 million last quarter. Book value has risen 12% through the first nine months of 2012, but the shares still trade at a modest 17% premium to that book value.

Berkshire's earnings press release emphasizes that "the limited information that follows in this press release is not adequate for making an informed investment judgment." Due to the extent of Berkshire's operations, making sense of the moving parts takes a bit of time and experience following the company.

Fool analyst and Inside Value advisor Joe Magyer has been following Berkshire for years; in his premium report, published in September, he writes: "No investment is a slam dunk, but the range of outcomes with Berkshire's stock today skews deeply in investors' favor." Click here to receive his report and a year's worth of updates that will include a full analysis of today's earnings report.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2096083, ~/Articles/ArticleHandler.aspx, 10/22/2014 2:53:33 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement