NYSE:BRK.B: good value for what you're paying.

Last update: Sep 27, 2023

Uncover the potential of BERKSHIRE HATHAWAY INC-CL B (NYSE:BRK.B) as our stock screener's choice for an undervalued stock. NYSE:BRK.B maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

A Closer Look at Valuation for NYSE:BRK.B

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:

Based on the Price/Earnings ratio of 0.02, the valuation of BRK.B can be described as very cheap.
Based on the Price/Earnings ratio, BRK.B is valued cheaper than 100.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of BRK.B to the average of the S&P500 Index (25.55), we can say BRK.B is valued rather cheaply.
A Price/Forward Earnings ratio of 0.01 indicates a rather cheap valuation of BRK.B.
Based on the Price/Forward Earnings ratio, BRK.B is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
BRK.B is valuated cheaply when we compare the Price/Forward Earnings ratio to 18.74, which is the current average of the S&P500 Index.
BRK.B's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. BRK.B is 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.
BRK.B's earnings are expected to grow with 12.33% in the coming years. This may justify a more expensive valuation.

Profitability Insights: NYSE:BRK.B

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:BRK.B has earned a 7 out of 10:

With an excellent Return On Assets value of 8.34%, BRK.B belongs to the best of the industry, outperforming 85.86% of the companies in the same industry.
The Return On Equity of BRK.B (16.09%) is better than 82.83% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.54%, BRK.B is in the better half of the industry, outperforming 74.75% of the companies in the same industry.
The 3 year average ROIC (3.32%) for BRK.B is below the current ROIC(3.54%), indicating increased profibility in the last year.
The Profit Margin of BRK.B (26.09%) is better than 83.84% of its industry peers.
BRK.B's Operating Margin has improved in the last couple of years.
In the last couple of years the Gross Margin of BRK.B has grown nicely.

What does the Health looks like for NYSE:BRK.B

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:BRK.B has received a 5 out of 10:

BRK.B has a Altman-Z score of 1.65. This is in the better half of the industry: BRK.B outperforms 70.71% of its industry peers.
Looking at the Debt to FCF ratio, with a value of 4.83, BRK.B is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
A Debt/Equity ratio of 0.23 indicates that BRK.B is not too dependend on debt financing.
BRK.B has a better Debt to Equity ratio (0.23) 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.

A Closer Look at Growth for NYSE:BRK.B

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:BRK.B scores a 6 out of 10:

The Earnings Per Share has grown by an nice 10.09% over the past year.
Measured over the past years, BRK.B shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.98% on average per year.
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.
Based on estimates for the next years, BRK.B will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.33% on average per year.
Based on estimates for the next years, BRK.B will show a quite strong growth in Revenue. The Revenue will grow by 13.58% on average per year.
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.

Disclaimer

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.