Berkshire Hathaway: 3 Reasons To Buy (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Berkshire Hathaway's large cash mix offers an opportunity for value addition during a market downturn, especially if the dry powder is deployed well.
• The insurance business is thriving, with revenues growing in the double digits and EBIT margins above 25%. The outlook is bright, driven by pricing and volume tailwinds.
• Expansionary manufacturing and servicing PMIs bode well for Berkshire's wholly owned subsidiaries that make up more than half of operating EBIT.
• Valuations are at a premium vs historical median levels, but it may be acceptable given the cash balance advantage and business tailwinds. Relative technicals vs the S&P 500 are bullish.
• Worsening net working capital intensity due to lower benefits payable days in the insurance business is a risk monitorable.

Read the full article here.