omagh Posted January 7, 2011 Share Posted January 7, 2011 Not sure if this was posted, but Tilson has updated his valuation of BRK. He's calling BRK a 75-cent dollar with reasonable growth projections for 2011. http:// www.tilsonfunds.com/BRK.pdf -O Link to comment Share on other sites More sharing options...
shalab Posted January 7, 2011 Share Posted January 7, 2011 My own estimate is around 150K/A share. However, the next year I expect BRK to do better and eventually reach the same figure as Tilson. Link to comment Share on other sites More sharing options...
philassor Posted January 7, 2011 Share Posted January 7, 2011 thanks for the link; interesting presentation. Link to comment Share on other sites More sharing options...
NormR Posted January 7, 2011 Share Posted January 7, 2011 A little bit of inversion. Value = Investments + P/E * Pre-tax earnings from non-investments Current Price = 120,600 Investments = 88,000 PTEFNI = 7,200 Set Value = Price, solve for current P/E P/E = (120,600 - 88,000)/7,200 = 4.5 Seems like a low multiple. Now consider a 30% discount for the investments. Like a rather out of favour closed end fund without the Buffett factor. P/E = (120,600 - 88,000*.7)/7,200 = 8.2 (Pre tax P/Es) Time to breakup the company to unlock value? ;) Link to comment Share on other sites More sharing options...
Guest Bronco Posted January 10, 2011 Share Posted January 10, 2011 Thanks for the link. Norm - what do you propose they break up? The railroad / utilities from the rest? They just bought it! Breakup ain't going to happen. Link to comment Share on other sites More sharing options...
Guest longinvestor Posted January 10, 2011 Share Posted January 10, 2011 Thanks for the link. Norm - what do you propose they break up? The railroad / utilities from the rest? They just bought it! Breakup ain't going to happen. Agree, no breakup happening. That would be complicating the job of preserving the Berkshire culture in two parts versus one. Having said that, who knows what kind of operational problems the company will see when they double in operating revenues. The Netjets saga will surely replicate in other places in the coming years. Surely they have learned from this experience, more importantly if Sokol is going to get the reins, that is a good thing as he was in a hand-to-hand combat @ Netjets. I am hoping Netjets comes up during the AGM this year. Link to comment Share on other sites More sharing options...
Guest Bronco Posted January 10, 2011 Share Posted January 10, 2011 If you step back and think about it, a lot of the companies owned by BRK seem like pieces of crap. Dear God, if Biglari was running dairy queen we would never hear the end of it. What about if Eddie Lampert bought Acme Brick? Or if Immelt bought Shaw Industries? My point isn't to insult the master, but to point out there is a lot of opporunity for BRK to start adding some real companies. I see utilities in the future. How much would Buffett love the privatized Wrigley or the private Mars for that matter? How about a beer company (BUD or TAP?). All kinds of potential moving forward. How about a Quest Diagnostics? A Becton Dickinson? There is all kinds of massive potential for BRK. At least that is my vision. Link to comment Share on other sites More sharing options...
Myth465 Posted January 10, 2011 Share Posted January 10, 2011 Bronco I prefer the LUK model. Link to comment Share on other sites More sharing options...
twacowfca Posted January 11, 2011 Share Posted January 11, 2011 If you step back and think about it, a lot of the companies owned by BRK seem like pieces of crap. Dear God, if Biglari was running dairy queen we would never hear the end of it. What about if Eddie Lampert bought Acme Brick? Or if Immelt bought Shaw Industries? My point isn't to insult the master, but to point out there is a lot of opporunity for BRK to start adding some real companies. I see utilities in the future. How much would Buffett love the privatized Wrigley or the private Mars for that matter? How about a beer company (BUD or TAP?). All kinds of potential moving forward. How about a Quest Diagnostics? A Becton Dickinson? There is all kinds of massive potential for BRK. At least that is my vision. DQ has a great ROC as almost all of their units are franchised. :) NetJets had the same potential, but WEB allowed their former manager to give puts to the buyers of fractional shares in their planes. Link to comment Share on other sites More sharing options...
Guest Bronco Posted January 11, 2011 Share Posted January 11, 2011 Twa - I hear you my friend, but you know we would hear how the stores are run down, etc. if this was a Biglari company. I really wasn't picking on any particular business but I do think BRK has entered a new phase and that is buying entire companies at higher $$ (larger market caps or absolute dollar amounts). I guess Marmon was fairly big but you get my point. Still think a utility is next. I guess I am on the same page as Tilson in this report - so much $$ will be generated over the next 5 years...what to do, what to do? Link to comment Share on other sites More sharing options...
beerbaron Posted January 12, 2011 Share Posted January 12, 2011 I guess I am on the same page as Tilson in this report - so much $$ will be generated over the next 5 years...what to do, what to do? That is what's so great about BRK... What to do? Nothing if it's something stupid. There are not a lot of managers with that discipline! BeerBaron Link to comment Share on other sites More sharing options...
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