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Berkshire Hathaway Inc. (BRK-A): Cook & Bynom Praises Its Management

Nina Zdinjak

Cook & Bynam Capital Management, a Birmingham, Alabama-based partner-owned money manager,  has just released its 2018 Annual Letter, in which it has shared its opinion on the stocks from its concentrated equity portfolio. Among these stocks was Berkshire Hathaway Inc. (NYSE:BRK-A), whose management the fund praised in the letter. Among other things, the fund also reported its return since inception which amounted to 7.1% versus 6.4% that S&P 500 delivered. If you are interested you can download a copy of its letter - here, and now we bring you only its comments on Berkshire Hathaway.

"We had the opportunity to spend a few hours with one of Berkshire’s top managers earlier in 2018. Our primary takeaway from that meeting is that Berkshire continues to have a deep bench of outstanding people operating in a highly rational culture. Maintaining this culture and continuing to attract outstanding talent are keys to Berkshire’s success over the next thirty years. We have built positions in Berkshire twice in our careers – both times at approximately 1.1x book value. The company is cheap at those levels. We create more complicated models to value Berkshire, but the book value shorthand works fairly well. Currently, Berkshire trades at about 1.4x book value if one values the equity portfolio at current market prices, which is the valuation at which Berkshire bought back shares in the third quarter."

[caption id="attachment_563955" align="aligncenter" width="750"] Krista Kennell/Shutterstock.com Krista Kennell/Shutterstock.com[/caption]

Berkshire Hathaway is a multinational conglomerate holding company, headquartered in Omaha, Nebraska. This $516.58 billion market cap company wholly owns renowned brands like Duracell, Long & Foster, Net Jets, Lubrizol, GEICO, and Dairy Queen, among others. Over the past 12 months, its stock gained 38%, and on April 12, it had a closing price of $314,250. It is trading at a price-to-earnings ratio of 128.47.

Disclosure: None.

This article was originally published at Insider Monkey.