Don't overlook NYSE:BRK.B—it's a hidden gem with strong fundamentals and an attractive price tag.

Last update: Oct 10, 2023

BERKSHIRE HATHAWAY INC-CL B (NYSE:BRK.B) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NYSE:BRK.B showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

ChartMill's Evaluation of Valuation

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:BRK.B has received a 9 out of 10:

With a 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 cheaply inside the industry as 100.00% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 25.63, BRK.B is valued rather cheaply.
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.
Compared to an average S&P500 Price/Forward Earnings ratio of 18.82, BRK.B is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, BRK.B is valued cheaper than 84.00% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, BRK.B is valued a bit cheaper than the industry average as 70.00% of the companies are valued more expensively.
The 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.

Profitability Insights: NYSE:BRK.B

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:BRK.B has achieved a 7:

BRK.B has a better Return On Assets (8.34%) than 86.00% of its industry peers.
BRK.B has a Return On Equity of 16.09%. This is amongst the best in the industry. BRK.B outperforms 83.00% 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 75.00% of the companies in the same industry.
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.
With an excellent Profit Margin value of 26.09%, BRK.B belongs to the best of the industry, outperforming 84.00% of the companies in the same industry.
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.

Deciphering NYSE:BRK.B's Health Rating

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:BRK.B has earned a 5 out of 10:

BRK.B has a Altman-Z score of 1.64. This is in the better half of the industry: BRK.B outperforms 71.00% of its industry peers.
BRK.B has a better Debt to FCF ratio (4.83) than 67.00% 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.
BRK.B has a better Debt to Equity ratio (0.23) than 62.00% of its industry peers.
The Current ratio of BRK.B (1.47) is better than 62.00% of its industry peers.

Looking at the Growth

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:

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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

More Decent Value stocks can be found in our Decent Value screener.

Our latest full fundamental report of BRK.B contains the most current fundamental analsysis.

Disclaimer

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.