In the video below, Foolish financial analyst Matt Koppenheffer takes a look at Berkshire Hathaway (NYSE: BRK-B ) and why it may not be so easy for Warren Buffett and company to make a big acquisition anytime soon.
Buffett likes to talk about pulling out the old elephant gun when he wants to make a purchase. Last time he did so, in November 2009, Berkshire bagged a big one: Burlington Northern railroad.
It was a near-ideal time to do so, Matt says. Since that time, the S&P 500 index is up 45%. Meanwhile, CSX (NYSE: CSX ) , a comparable company to Burlington, is up 72%. CSX's profits have climbed, and the multiple that investors are willing to pay for the company has grown. Matt says we can assume the same for Burlington.
But things are different today. We've had a huge rally in the markets. There are still sectors that may be undervalued, but it's going to be tough for Buffett to find the type of value he looks for in a large, publicly traded company, Matt says.
Investors may need to be patient and wait for the market to soften, Matt says.
Warren Buffett's long track record of success has made him one of the best investors of all time. With the Buffett at the helm, Berkshire Hathaway has grown book value per share at a compounded annual rate of 19.8% for nearly 50 years! Despite an incredible historical track record, investors have to understand the key issues to watch moving forward. To help investors, the Fool's resident Berkshire Hathaway expert Joe Magyer has created this premium research report on the company. Inside you'll receive ongoing updates as key news hits, as well as reasons to both buy and sell the stock. Claim a copy by clicking here now.