|Bid||213.40 x 100|
|Ask||214.60 x 200|
|Day's Range||211.14 - 214.50|
|52 Week Range||158.61 - 214.50|
|PE Ratio (TTM)||28.29|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||222.75|
It has been a fun ride for growth stocks the past few years, but it looks as though value stocks are coming back into vogue and that’s got portfolio managers optimistic about their chances as we enter 2018. “There may be positive momentum in the stock market right now, but that is only going to make it more expensive,” said Matthew Watson, a portfolio manager with James Advantage Funds. In 2017, the S&P 500 Value Index was up 12.6%, half the annual rate of return for the S&P 500 Growth Index.
Berkshire Hathway (BRK.B) has added holdings in big names such as Apple (AAPL) and Monsanto (MON) to its portfolio. Its portfolio was valued at $178 billion at the end of 3Q17, compared with $162 billion at the end of 3Q16, largely due to a conversion of warrants to stock in Bank of America (BAC). Berkshire is slowly exiting from IBM (IBM), Wells Fargo (WFC), and Charter Communications (CHTR) due to expected weak operating performance.
The US Senate has approved cutting tax rate from 35% to 21%, which could present windfall gains to corporates and long-term adjustments in operating flow generation. Whereas the tax break will likely be profitable for equity investors such as Berkshire Hathaway (BRK.B), companies engaged in US exports have weakened due to growing expectations of a fiscal deficit and the domestic manufacturing sector. Berkshire is expected to benefit from lower taxes on its holdings.
An accounting change is about to have a big effect on Warren Buffett’s conglomerate because swings in the value of its stock portfolio will soon be included in earnings.
In the previous part of this series, we discussed that Warren Buffett is fully bullish on the stock market (SPX-INDEX), and he believes that the tax reform will add more value to the equity market rally. Billionaire investor Warren Buffett is very optimistic about the financial sector. Wells Fargo (WFC), Apple (AAPL), Kraft Heinz (KHC), Coca-Cola (KO), and Bank of America (BAC) were Berkshire Hathaway’s largest holdings in 3Q17.
Branded consumer staples aren't what they used to be, the rise of robot investors, and Berkshire Hathaway takes one step closer to implementing its post-Buffett succession.
Berkshire Hathaway (BRK.B) is sitting on a cash pile of $100 billion. Whereas the company had long kept a policy of no dividends, repurchases, or stock splits, Buffett and Munger altered their strategies to accommodate repurchases for the first time in 2011. Berkshire has agreed to do buybacks at a premium of not more than 20% for Class A and B shares through open-market or privately negotiated transactions.