Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

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Thursday, November 02, 2006

Berkshire Hathaway Earnings Preview

Berkshire Hathaway (BRK-A) reports earnings tomorrow morning before the market open. Most people love Warren Buffett and people love tracking the highest nominally priced stock in the US.

The funny thing about "BRK-A" is that you can't really assign a consensus estimate to the company because so few analysts actually cover the true multi-headed hydra. So consensus is a bit of a dartboard that isn't broad enough to count. There are two estimates, with one at $1,143.00 and one at $1,344.00. We won't endorese any numbers on this and won't hold much merit to any fixed number.

What we are expecting though is a strong quarter with great earnings. The company is diversified enough that they get hurt in general economic slowdowns, but it has so much insurance and reinsurance exposure. With no major hurricanes this year and with other insurance and re-insurance posting incredibly strong numbers, a strong earnings report is considered a shoe-in. At least that is the street logic.

The A shares closed at $104,106.00, down 0.65% or -$684.00. The 52-week trading range is $85,400.00 to $105,600.00. The B shares closed at $3,473.00, down 0.58% or -$20.25. The 52-week trading range is $2,825.00 to $3,523.00.

We may get to hear some new ideas of potential targets that Buffett is looking at, and that is the main interest of traders. Traders often chase up stocks that Buffett has acquired, even though the list of stocks is not usually seen until SEC filings come in weeks later. Recently Target (TGT) was added, and they increased their stake in Johnson & Johnson (JNJ).

Jon C. Ogg
November 2, 2006

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