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Fundamental analysis: Berkshire Hathaway Inc. (BRK-B)

Awarener score: 8.1

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Superb), the business stability (Modest) and growth (Average), and the company's inclination to return cash to the stockholders (Very good).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 5.5

  • Business has been growing at a low pace. It's been encouraging in relation to peer companies.
  • Berkshire Hathaway Inc. business trend isn't so stable. The higher the stability, the lower the risk. It looks mediocre against rivals.

Margins score: 6.3

  • BRK-B profit margins -on goods and services sold- are usually extremely poor. They stand bottom tier against rival companies.
  • Business profit on sales tends to be hardly sufficient. It's last-in-rank when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually good. They remain excellent in relation to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be very good in relation to total revenues. They're still well ranked against similar companies.
  • Profits -before income taxes- are usually very good considering total sales, and remain more than average in relation to rivals.
  • Total net profit tends to be very good when confronted to sales. Company stands more than average in relation to comparable firms.

Growth score: 8.8

  • Berkshire Hathaway Inc. has an unknown gross margin growth, as there is not enough data to analyze. It's been impossible to compare to competitors.
  • There is not sufficient data to estimate the operating income margin trend, which has been therefore unknown against comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at an excellent pace, which compares similar to peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at an excellent tempo. It turns to be close to average when compared to similar stocks.
  • In past years, profits -before income taxes- grew at an excellent speed. It was slightly better than rivals.
  • In the previous years, growth trend on total net profit has been very good, and almost average when measured against peer companies.
  • Earnings per share have grown at an excellent rhythm in past years. It's been close to average when compared to industry peers.

Miscellaneous score: 7.0

  • BRK-B had hardly to pay income taxes in relation to profits made in the past years. It's been somewhat worse than peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 7.8

  • Berkshire Hathaway Inc. usually gets very good returns on the resources it controls. It proves more than average in relation to peer firms.
  • The company normally gets very good proceeds -on the resources directly invested in the business-. They remain excellent in relation to similar companies.
  • Profitability -in relation to owned resources- is usually quite good. It ranks more than average in relation to competitors.
  • In the past, got very good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's great when measured against comparable enterprises.

Usage of Funds score: 6.3

  • BRK-B usually uses a significant portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is abundant. It stands great when measured against rival firms.
  • The company is usually investing in new property, plant, and equipment, to improve its operating capabilities, which is great when measured against industry peers.
  • In the past twelve months the stock paid no dividends. It came bottom tier against competitors.
  • The company pays no dividend, so measuring its growth is meaningless. The company has behaved in an conservative way compared to similar firms.
  • As no dividends are paid, it is useless trying to estimate their sustainability in time. Sustainability looks not applicable in regard to comparable companies.
  • The company usually reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains a slight improvement compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you 're interested in a technical explanation. It stands a slight improvement compared to rivals.
  • The company uses a moderate portion of genuine fund generation to reward investors, which can probably be sustained for as long as business doesn't turn very sour. It still looks substantially worse when measured against competitors.

Balance Sheet score: 6.0

  • Berkshire Hathaway Inc. intangible assets (like brands and goodwill) represent a small portion of resources controlled, according to accounting books. It isn't that a significant risk of liquidating them if the company ever gets in financial distress. It happens to be substantially worse when measured against peer companies.
  • The company has plenty short-term resources to face short-term obligations. There're no liquidity concerns. It turns to be a disappointment compared to similar firms.
  • Almost no resources controlled were provided for with financial debt. Financial strength is great. Company could significantly increase debt if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains bottom tier against rival firms.
  • Controlled resources can be made into cash within reason, which is quite good for liquidity. It looks encouraging in relation to rivals.
  • For every dollar of short-term obligations, the company has plenty of dollars in cash and short-term receivables. It's a disappointment compared to peer firms.
  • For every dollar of short-term obligations, the company has plenty of dollars in cash and equivalents, which is worse than most similar enterprises.
  • Usually, sales are on a two-months credit. It still ranks encouraging in relation to peers.
  • Days of inventory outstanding are not known. It comes up as a big question mark against competitors.
  • We could not gauge the normal operating cycle of the company. It happens to be a mystery against peers.
  • Unfortunately, we had not enough data to estimate the days of payables outstanding. It ranks unknown against industry peers.
  • Cash conversion cycle remains unknown, due to not having enough inputs. It's incomparable against similar companies.
  • Company earns net interest income on its investments and therefore is in a quite comfortable financial position. It stands top-notch against rival firms.
  • There is insufficient data to conclude on the relationship of EBITDA and debt for this company. It ranks unknown against comparable enterprises.
  • Revenues are excellent in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements, allows the company to keep more money to reward stockholders in the long run. It looks a disappointment compared to similar firms.
  • Resource exploitation is very good when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still well ranked against peer companies.

Valuation score: 6.9

  • Berkshire Hathaway Inc. looks heavily expensive in relation to profits and financial position. It happens to be below average when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a weak position compared to peers.
  • In the past twelve months, the company generated extraordinary free funds in relation to the stock price, which stands worse than most similar companies.
  • The company usually generates plenty more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share looks to be very attractive. It's still substantially worse when measured against industry firms.
  • In the past twelve months, the company has slightly rewarded investors, considering both dividends and share on the pie of earnings. It came up rather normal in relation to peer ventures.
  • The company has substantial more cash than debt. It might be poised to increase stockholder payments, or to fund new business projects. It looks mediocre against similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation is huge, as profits were extremely low in relative terms. It ranks encouraging in relation to peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a roughly two to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a weak position compared to rival firms.
  • The relation between the stock price and accounting book value might be reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains somewhat worse than peer firms.
  • In the past twelve months, the operating business earned little money when compared to the current stock price and financial position. It happens to be below average when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown an excellent earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be undervalued. It's still in a weak position compared to peer companies.

Total score: 6.8


BRK-B logos

Company at a glance: Berkshire Hathaway Inc. (BRK-B)

Sector, industry: Financial Services, Insurance—Diversified

Market Cap: 590.45 billions

Revenues TTM: 332.84 billions

Berkshire Hathaway Inc., through its subsidiaries, engages in the insurance, freight rail transportation, and utility businesses worldwide. It provides property, casualty, life, accident, and health insurance and reinsurance; and operates railroad systems in North America. The company also generates, transmits, stores, and distributes electricity from natural gas, coal, wind, solar, hydroelectric, nuclear, and geothermal sources; operates natural gas distribution and storage facilities, interstate pipelines, liquefied natural gas facilities, and compressor and meter stations; and holds interest in coal mining assets. In addition, the company manufactures boxed chocolates and other confectionery products; specialty chemicals, metal cutting tools, and components for aerospace and power generation applications; flooring products; insulation, roofing, and engineered products; building and engineered components; paints and coatings; and bricks and masonry products, as well as offers manufactured and site-built home construction, and related lending and financial services. Further, it provides recreational vehicles, apparel products, jewelry, and custom picture framing products, as well as alkaline batteries; castings, forgings, fasteners/fastener systems, and aerostructures; and seamless pipes, fittings, downhole casing and tubing, and mill forms. Additionally, the company distributes televisions and information; franchises and services quick service restaurants; distributes electronic components; and offers logistics services, grocery and foodservice distribution services, and professional aviation training and shared aircraft ownership programs. It also retails automobiles; furniture, bedding, and accessories; household appliances, electronics, and computers; jewelry, watches, crystal, china, stemware, flatware, gifts, and collectibles; kitchenware; and motorcycle apparel and equipment. The company was incorporated in 1998 and is headquartered in Omaha, Nebraska.

Awarener score: 8.1

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Superb), the business stability (Modest) and growth (Average), and the company's inclination to return cash to the stockholders (Very good).