Let’s talk about the popular Berkshire Hathaway Inc (NYSE:BRK.B). The company’s shares received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $217.25 at one point, and dropping to the lows of $191.42. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Berkshire Hathaway’s current trading price of $209.13 reflective of the actual 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 is Berkshire Hathaway worth?Good news, investors! Berkshire Hathaway is still a bargain right now. According to my valuation, the intrinsic value for the stock is $201086.54, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Berkshire Hathaway’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Berkshire Hathaway generate?Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Though in the case of Berkshire Hathaway, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Although BRK.B is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to BRK.B, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on BRK.B for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
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.