In a market where value is scarce, NYSE:BRK.B offers a refreshing opportunity with its solid fundamentals.

Last update: Oct 5, 2023

BERKSHIRE HATHAWAY INC-CL B (NYSE:BRK.B) has caught the attention of our stock screener as a great value stock. NYSE:BRK.B excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

How We Gauge Valuation for NYSE:BRK.B

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:BRK.B was assigned a score of 9 for valuation:

BRK.B is valuated cheaply with a Price/Earnings ratio of 0.02.
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 25.33.
With a Price/Forward Earnings ratio of 0.01, the valuation of BRK.B can be described as very cheap.
Based on the Price/Forward Earnings ratio, BRK.B is valued cheaper than 100.00% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 18.56, BRK.B is valued rather cheaply.
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.
The decent profitability rating of BRK.B 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.

How do we evaluate the Profitability for NYSE:BRK.B?

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:BRK.B was assigned a score of 7 for profitability:

BRK.B has a better Return On Assets (8.34%) than 85.86% of its industry peers.
BRK.B has a better Return On Equity (16.09%) than 82.83% of its industry peers.
BRK.B has a better Return On Invested Capital (3.54%) 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's Profit Margin of 26.09% is amongst the best of the industry. BRK.B outperforms 83.84% of its industry peers.
In the last couple of years the Operating Margin of BRK.B has grown nicely.
In the last couple of years the Gross Margin of BRK.B has grown nicely.

How We Gauge Health for NYSE:BRK.B

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:BRK.B, the assigned 5 for health provides valuable insights:

With a decent Altman-Z score value of 1.64, BRK.B is doing good in the industry, outperforming 70.71% of the companies in the same industry.
With a decent Debt to FCF ratio value of 4.83, BRK.B is doing good in the industry, outperforming 66.67% of the companies in the same industry.
BRK.B has a Debt/Equity ratio of 0.23. This is a healthy value indicating a solid balance between debt and equity.
BRK.B has a Debt to Equity ratio of 0.23. This is in the better half of the industry: BRK.B outperforms 61.62% of its industry peers.
BRK.B has a Current ratio of 1.47. This is in the better half of the industry: BRK.B outperforms 63.64% of its industry peers.

Growth Assessment of NYSE:BRK.B

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:BRK.B has earned a 6 for growth:

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.
BRK.B shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.03%.
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of BRK.B

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.