At last count, Warren Buffett’s Berkshire Hathaway lists 60 subsidiary companies on its website. These B shares are a ticket to participate in his value-driven investments, at a price far lower than the almost-$200,000 per share A shares.
Berkshire Hathaway B (BRK-B)
In the running for the bluest of the blue chips is Berkshire Hathaway B (BRK-B). It is comprised of many fine companies with an emphasis on the insurance business. Berkshire B is down considerably from its high of $152.90 in 2014.
One of the value measures Mr. Buffett likes to use when evaluating a firm for purchase is book value. In accounting, book value is a conservative measure of what a company would be worth if all the assets were sold off. The price of Berkshire B is slightly above 1.2 times book value right now. In the past, Warren Buffet has stated he would repurchase his own stock at about 1.2 times book value.
What will happen to Berkshire once Warren Buffet is no longer with us? This is a common question, as Warren Buffett is 85 years old. Berkshire Hathaway is composed of numerous companies, each under their own management. These should continue to be well run, even without their leader. Incidentally, this same analysis applies to Berkshire Hathaway A shares. But at its recent price, in the vicinity of $200,000 a share, it is not a feasible purchase for most investors.
Russ Kaplan, Heartland Adviser, www.russkaplaninvestments.com, 402-614-1321, September 24, 2015