Our stock screening tool has pinpointed BERKSHIRE HATHAWAY INC-CL B (NYSE:BRK.B) as an undervalued stock. NYSE:BRK.B maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.
Analyzing Valuation Metrics
ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:BRK.B, the assigned 9 reflects its valuation:
- The Price/Earnings ratio is 0.02, which indicates a rather cheap valuation of BRK.B.
- Based on the Price/Earnings ratio, BRK.B is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
- BRK.B's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.92.
- A Price/Forward Earnings ratio of 0.01 indicates a rather cheap valuation of BRK.B.
- BRK.B's Price/Forward Earnings ratio is rather cheap when compared to the industry. BRK.B is cheaper than 100.00% of the companies in the same industry.
- BRK.B is valuated cheaply when we compare the Price/Forward Earnings ratio to 19.00, which is the current average of the S&P500 Index.
- Based on the Enterprise Value to EBITDA ratio, BRK.B is valued cheaper than 83.84% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of BRK.B indicates a somewhat cheap valuation: BRK.B is cheaper than 69.70% of the companies listed in the same industry.
- BRK.B's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- BRK.B has a very decent profitability rating, which may justify a higher PE ratio.
- A more expensive valuation may be justified as BRK.B's earnings are expected to grow with 12.33% in the coming years.
Profitability Insights: NYSE:BRK.B
ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:BRK.B scores a 7 out of 10:
- BRK.B has a better Return On Assets (8.34%) than 85.86% of its industry peers.
- Looking at the Return On Equity, with a value of 16.09%, BRK.B belongs to the top of the industry, outperforming 82.83% of the companies in the same industry.
- The Return On Invested Capital of BRK.B (3.54%) is better than 74.75% of its industry peers.
- The last Return On Invested Capital (3.54%) for BRK.B is above the 3 year average (3.32%), which is a sign of increasing profitability.
- BRK.B has a Profit Margin of 26.09%. This is amongst the best in the industry. BRK.B outperforms 83.84% of its industry peers.
- BRK.B's Operating Margin has improved in the last couple of years.
- BRK.B's Gross Margin has improved in the last couple of years.
Health Insights: NYSE:BRK.B
ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:BRK.B, the assigned 5 reflects its health status:
- BRK.B has a better Altman-Z score (1.65) than 70.71% of its industry peers.
- BRK.B has a Debt to FCF ratio of 4.83. This is in the better half of the industry: BRK.B outperforms 66.67% of its industry peers.
- BRK.B has a Debt/Equity ratio of 0.23. This is a healthy value indicating a solid balance between debt and equity.
- The Debt to Equity ratio of BRK.B (0.23) is better than 61.62% of its industry peers.
- Looking at the Current ratio, with a value of 1.47, BRK.B is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
Growth Assessment of NYSE:BRK.B
Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:BRK.B boasts a 6 out of 10:
- BRK.B shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.09%, which is quite good.
- BRK.B shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.98% yearly.
- Looking at the last year, BRK.B shows a quite strong growth in Revenue. The Revenue has grown by 15.03% in the last year.
- The Earnings Per Share is expected to grow by 12.33% on average over the next years. This is quite good.
- The Revenue is expected to grow by 13.58% on average over the next years. This is quite good.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.
Our latest full fundamental report of BRK.B contains the most current fundamental analsysis.
Keep in mind
This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.