NYSE:BRK.B is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

Last update: Oct 11, 2023

Take a closer look at BERKSHIRE HATHAWAY INC-CL B (NYSE:BRK.B), a remarkable value stock uncovered by our stock screener. NYSE:BRK.B excels in fundamentals and maintains a very reasonable valuation. Let's break it down further.

Assessing 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:

A Price/Earnings ratio of 0.02 indicates a rather cheap valuation of BRK.B.
BRK.B's Price/Earnings ratio is rather cheap when compared to the industry. BRK.B is 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 (25.88), we can say BRK.B is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 0.01, the valuation of BRK.B can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of BRK.B indicates a rather cheap valuation: BRK.B is cheaper than 100.00% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 18.97. BRK.B is valued rather cheaply when compared to this.
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.
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 Examination 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:

The Return On Assets of BRK.B (8.34%) is better 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.
With a decent Return On Invested Capital value of 3.54%, BRK.B is doing good in the industry, outperforming 75.00% 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.
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.

Analyzing Health Metrics

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:

With a decent Altman-Z score value of 1.64, BRK.B is doing good in the industry, outperforming 71.00% of the companies in the same industry.
Looking at the Debt to FCF ratio, with a value of 4.83, BRK.B is in the better half of the industry, outperforming 67.00% 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 62.00% 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 62.00% of the companies in the same industry.

Analyzing Growth Metrics

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:BRK.B has received a 6 out of 10:

The Earnings Per Share has grown by an nice 10.09% over the past year.
BRK.B shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.98% yearly.
The Revenue has grown by 15.03% in the past year. This is quite good.
BRK.B is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.33% yearly.
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.

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

Check the latest full fundamental report of BRK.B for a complete fundamental analysis.

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.