I did DCF estimates for Snap-On Tools (sna) and Berkshire Hathaway (brk-a) over the weekend. I get $55.61 for SNA and $113,046.04 for BRK.A. As if my estimates were that precise. SNA traded at 59.01 on 2/11, meaning I’m valuing the stock 7.2% below the close on Friday. BRK.A traded at $127,400 on 2/12/11, meaning I’m calculating value at 12.5% below the current stock price. Barron’sraved about Berkshire Hathaway a couple of weeks ago, but I don’t see it. I’ve got the EPS right in the range Barron’s estimated and am forecasting growth of 3, 10, 8, 8, and 8 percent for the next five years.
A few things:
- Analyzing Berkshire Hathaway is very complicated. It took me all Saturday to read/analyze the 10Ks for the last couple of years. It is amazing that the head office only consists of 10,000 square feet. It must be all accountants and a couple of lawyers.
- Heavy discounts were applied to Berkshire Hathaway in case of losses from ‘inherited’ insurance coverage and in case the CEO retires/dies.
- I don’t see how railroads and trucking (XTRA) can not be affected by rising oil prices.
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