In late 2011, Whitney Tilson shared a presentation on his website in which he conducts an analysis of Berkshire Hathaway (BRK.A)(BRK.B) and arrives at an estimate of Berkshire Hathaway�� Intrinsic Value. Basically, Tilson went through several Berkshire Hathaway annual reports and highlighted several of Warren Buffett's comments where Buffett talks about the discrepancy in Berkshire's stock price and its intrinsic value. Tilson then focuses on a quote and chart that could be found by reading the1997 Berkshire Hathaway Chairman's Letter:
In our last two annual reports, we furnished you a table that Charlie and I believe is central to estimating Berkshire's intrinsic value. In the updated version of that table, which follows, we trace our two key components of value. The first column lists our per-share ownership of investments (including cash and equivalents) and the second column shows our per-share earnings from Berkshire's operating businesses before taxes and purchase-accounting adjustments (discussed on pages 69 and 70), but after all interest and corporate expenses. The second column excludes all dividends, interest and capital gains that we realized from the investments presented in the first column. In effect, the columns show what Berkshire would look like were it split into two parts, with one entity holding our investments and the other operating all of our businesses and bearing all corporate costs.
Pre-tax Earnings Per Share
Investments/Share Excluding All Income from investments
1967 $ 41 $ 1.09
1977 372 12.44
1987 3,910 108.14
1997 38,043 717.82What Tilson then does is take Berkshire's Investment's Per Share at book value and applies a multiple to Berkshire's pre-tax earnings per share that excludes all income from investments. Pretty straightforward right? It's definitely an alternative to some of the "sum of the parts" analysis I have seen from other individuals such as Tom Gayner's in the June 30, 2011 ed! ition of Value Investor Insight.While the approach is straightforward and makes sense, Berkshire's new share repurchase plan may have changed things a bit.
Top Stocks To Buy Right Now: Astronics Corporation(ATRO)
Astronics Corporation, through its subsidiaries, designs and manufactures products for the aerospace and defense industries worldwide. It operates in two segments, Aerospace and Test Systems. The Aerospace segment?s product lines include aircraft lighting, cabin electronics, airframe power, avionics databus products, and airfield lighting. This segment serves airframe manufacturers that build aircraft for the commercial, military, and general aviation markets; suppliers; and aircraft operators, such as airlines and branches of the U.S. Department of Defense, as well as the Federal Aviation Administration and airport operators. The Test Systems segment designs, develops, manufactures, and maintains communications and weapons test systems, and training and simulation devices for military applications. It sells its products primarily to the U.S. military, foreign militaries, and manufacturers of military communication systems. The company was founded in 1968 and is headquart ered in East Aurora, New York.Advisors' Opinion:
- [By Jeremy Bowman]
What: Shares of Astronics Corporation (NASDAQ: ATRO ) were headed for the stars today, gaining 11% after a strong quarterly earnings report.
- [By Victor Selva]
Having to deal with competitors such as Astronics Cp (ATRO) or B/E Aerospace Inc. (BEAV), and being able to maintain a competitive position in the market, shows ATS麓s ability for great evolution and profitable growth.
- [By Rich Smith]
Astronics Corp. (NASDAQ: ATRO ) is bulking up in aerospace.
On Tuesday, the manufacturer of high-performance lighting, electrical power, and automated test systems for the global aerospace and defense industries announced that it has agreed to buy fellow aerospace interior components maker PECO for approximately $136 million, cash. Privately owned PECO is a supplier to Boeing and a maker of fuel access doors and also "passenger service units" that incorporate air handling, emergency oxygen, electrical power management, and cabin lighting systems.�
Top 5 Income Companies To Watch In Right Now: Barrick Gold Corporation (ABX)
Barrick Gold Corporation engages in the production and sale of gold, as well as related activities, such as exploration and mine development. The company has a portfolio of 25 operating mines and a pipeline of projects located in North America, South America, the Australia Pacific region, and Africa. It also produces copper and holds interests in oil and gas properties located in Canada. The company was founded in 1983 and is based in Toronto, Canada.Advisors' Opinion:
- [By Ploutos]
International StocksThe broad emerging market index outperforms the S&P 500. The MSCI Emerging Market Index has returned -7.8%, lagging the S&P 500 by 27% as slower global growth, decelerating Chinese growth, lower commodity prices from this producer heavy index, and rising geopolitical tensions have fueled a veritable rout. My thesis was that improved growth in the developed world would have positive spillover effects in emerging markets. This has not borne out. Grade FRising German inflation signals a new leg of the Eurozone crisis as multi-speed economic growth hampers the effectiveness of centralized monetary policy. German CPI is south of 2% as the economic recovery remains muted. My belief was that faster growth in Northern Europe would fuel inflation pressures, but that ECB monetary accommodation would need to continue to be supportive of the weak economies in the South, creating an uncomfortable disconnect. Growth has not been strong enough anywhere on the continent to cause this type of worry although Germany continues to outperform Italy and Spain. Grade C-European election results become market moving events. Certainly worries about the return of Berlusconi in Italy post-Monti and a fractured coalition in Portugal became notable market events that weakened each countries sovereign bonds, but the European crisis has notably receded from 2012. Grade B-Social unrest in China, given the growing gulf between urban wealthy and rural poor, rattles global markets. Concerns in China have rattled emerging markets, but not due to an Arab Spring-type uprising. Grade C-Greek stocks and bonds both post positive returns, but the economy remains mired in recession. Greece remains in its sixth year of recession, but the Athens Stock Exchange has eked out a tepid 2% total return. The Greek 10-yr bond has rallied year-to-date with the yield on the security declining by 2% from 11.7% to 9.7%. The price on the bond has risen from 50 to 59, producing a total ret
- [By Eric Lam]
Barrick Gold Corp. (ABX) and Goldcorp Inc. climbed at least 1.5 percent as gold advanced. Teck Resources (TCK/B) Ltd. and First Quantum Minerals Ltd. rallied more than 1.5 percent as copper rose. Endeavour Silver Corp. surged 8.3 percent as the metal�� price increased the most since January. Royal Bank of Canada and Toronto-Dominion Bank, the nation�� largest lenders, added more than 0.5 percent amid better-than-estimated housing data.
- [By Doug Ehrman]
Gold, as represented by the SPDR Gold Trust (NYSEMKT: GLD ) , fell quickly on the remarks, but bounced back to unchanged in short order. The gold miners -- including Barrick (NYSE: ABX ) , Goldcorp (NYSE: GG ) , and Newmont Mining (NYSE: NEM ) had similar reactions (see chart). Looking ahead, the Fed is expecting U.S. GDP growth of 2.3% to 2.6% in 2013, accelerating to 3% to 3.5% in 2014. This growth is expected to come against a backdrop of falling unemployment, and an inflation rate in line with the targeted 2% rate set by the Fed.
Top 5 Income Companies To Watch In Right Now: Greengro Technologies Inc (GRNH)
GreenGro Technologies Inc., formerly Authoriszor Inc., provides management services for the planning, construction, staffing and operation of medical marijuana dispensaries, and nurseries on behalf of non-profit patient co-operatives. Through long term contracts, the Company operates non-profit centers, returning all unused patient contributions, on a pro-rata basis to each co-op member in the form of additional product. In February 2010, Authoriszor Inc. completed the acquisition of GreenGro Technologies, Inc., and CannovaHealth, a clinic management company. In September 2011, the Company acquired Vertical Hydrogarden, Inc.
Medical marijuana (medical cannabis) is an alternative method to other forms of medication used to manage or alleviate pain without the undo side-effects caused by the prescription medication being used to treat an illness. The Company stands ready to assist in patient care co-operatives throughout the United States.Advisors' Opinion:
- [By Dan Burrows]
MediSwipe (MWIP) has tripled, with MWIP stock up 200%. Cannabis Science (CBIS) is closing in on quadrupling, as CBIS stock gained 273%. And GreenGro Technologies (GRNH)? Brace yourself, because GRNH stock is up over 1,000% … including an 18% so far today.
- [By Dan Burrows]
But it doesn’t end there. Investors should run away from all OTC marijuana stocks, including Medical Marijuana (MJNA), Cannabis Science (CBIS), CannaVest (CANV), MediSwipe (MWIP) and GreenGro Technologies (GRNH). As the SEC warns:
Top 5 Income Companies To Watch In Right Now: Guardian 8 Holdings (GRDH)
Guardian 8 Holdings (G8), formerly Global Risk Management & Investigative Solutions, is a development-stage company. G8 focuses on the commercialization and sale of its Personal Security Guardian device. The Personal Security Guardian device is a personal security device that incorporates countermeasures to help defend against personal attacks, including alarms to frighten and video the attacker and/or alert others, latest technology utilizing light emitting diode (LED) lights to momentarily visually impair a would be attacker at night, as well as global positioning system (GPS), audio/visual communications and Bluetooth technology advising security or law enforcement of the incident. On November 30, 2010, the Company merged with Guardian 8 Corporation.
Prior to the reverse merger with Guardian 8 Corporation, the Company focused on the provision of investigative, technical information technology (IT), background, document verification and data banks of security information. As of December 31, 2010, the Company completed the initial design and tooling for the first product under development. As of December 31, 2010, the Company had not generated any revenue.
The Company competes with Taser International, Armor Holdings, Inc., TigerLight, PepperBall Technologies and FN Herstal.Advisors' Opinion:
- [By Peter Graham]
Small cap stocks Banjo & Matilda, Inc (OTCMKTS: BANJ), Amazonica Corp (OTCBB: AMZZ) and Guardian 8 Holdings (OTCMKTS: GRDH) have been getting some extra attention in various investment newsletters or email alerts. Of course, there is nothing wrong with properly disclosed promotion or investor relations type of activities but they can cause problems for unwary investors and traders alike. So how hot are these three small cap stocks? Here is a closer look and a reality check: