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Zacks Value Investor Highlights: Berkshire Hathaway, Alphabet, Sherwin-Williams, Masco and Armstrong World
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For Immediate Release
Chicago, IL – April 29, 2024 – Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2262889/why-berkshire-hathaway-should-be-in-the-magnificent-7
Why Berkshire Hathaway Should Be in the Magnificent 7
Welcome to Episode #367 of the Value Investor Podcast.
(1:00) - Can Value Investors Gain Exposure Into The Magnificent 7?
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
Recently, Tracey looked at the top 10 holdings in the S&P 500 index ETFs for a podcast she was doing with Zacks Director of ETF Research, Neena Mishra. When Tesla’s stock was surging, the top 7 were what became known as the Magnificent 7: Microsoft, Apple, NVIDIA, Amazon, Meta Platforms, Alphabet and Tesla.
But Tesla’s stock plunged 50% this year and that moved it out of not only the top 7, but the top 10 holdings in the S&P 500 altogether.
What stock is now in the 7th position?
Berkshire Hathaway. Warren Buffett’s old economy conglomerate has now joined the elite technology companies at the top.
With Tesla faltering, why not add Berkshire Hathaway to the Magnificent 7 list?
Berkshire Hathaway Versus Alphabet
The argument for including Berkshire Hathaway isn’t as far-fetched as it may seem. When you look at the valuations and fundamentals of Berkshire Hathaway and compare them to some of the other Mag 7 stocks, there are a lot of similarities.
Tracey compared Berkshire Hathaway (BRK.B - Free Report) to Alphabet (GOOGL - Free Report) because Alphabet is one of the cheapest of the Mag 7 stocks.
1. Cash Rich:Berkshire Hathaway had $168 billion in cash as of Dec 31, 2023. Alphabet had $110 billion as of Mar 31, 2024.
2. Share buyback plans:Berkshire bought back $9.2 billion in 2023 and Alphabet announced an additional $70 billion for 2024.
3. Attractive P/E ratios:Berkshire Hathaway’s forward P/E is 22.1 while Alphabet’s is 23.3.
4. Attractive P/S ratios:Berkshire Hathaway’s P/S ratio is 2.4 while Alphabet’s is 6.4
Old Economy Companies in Berkshire Hathaway: Winners?
How do you value the rest of Berkshire’s portfolio in the companies it owns outright? Tracey looked at some publicly traded competitors for ideas.
Sherwin Williams makes paint. Berkshire Hathaway owns competitor Benjamin Moore. Sherwin Williams is not cheap. It’s trading with a forward P/E of 26. In the first quarter, sales at the consumer brand segment fell 7% as fewer homes sold and less remodeling was done.
Sherwin Williams pays a dividend, however, yielding 1%.
Masco Corp. also owns a well-known paint brand: Behr paint. But Masco did not see a restoration of volumes in the first quarter. Volumes fell 4%. Masco expects Behr paint to be down slightly in the first half of the year.
Masco is attractively priced, with a forward P/E of 17.8. Masco also pays a dividend, yielding 1.6%.
Armstrong World Industries makes ceiling and wall system solutions in both residential and commercial settings, including in healthcare facilities and classrooms. Berkshire Hathaway also owns several companies that are in similar old school industries like Shaw Industries which makes flooring.
Armstrong World Industries is trading with a forward P/E of 20.3. It also pays a dividend, yielding about 1%. Armstrong World Industries is a Zacks #2 (Buy) stock.
What Else Do You Need to Know About Berkshire Hathaway Being in the Mag 7?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of GOOGL in her own personal portfolio.]
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Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Value Investor Highlights: Berkshire Hathaway, Alphabet, Sherwin-Williams, Masco and Armstrong World
For Immediate Release
Chicago, IL – April 29, 2024 – Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2262889/why-berkshire-hathaway-should-be-in-the-magnificent-7
Why Berkshire Hathaway Should Be in the Magnificent 7
Welcome to Episode #367 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
Recently, Tracey looked at the top 10 holdings in the S&P 500 index ETFs for a podcast she was doing with Zacks Director of ETF Research, Neena Mishra. When Tesla’s stock was surging, the top 7 were what became known as the Magnificent 7: Microsoft, Apple, NVIDIA, Amazon, Meta Platforms, Alphabet and Tesla.
But Tesla’s stock plunged 50% this year and that moved it out of not only the top 7, but the top 10 holdings in the S&P 500 altogether.
What stock is now in the 7th position?
Berkshire Hathaway. Warren Buffett’s old economy conglomerate has now joined the elite technology companies at the top.
With Tesla faltering, why not add Berkshire Hathaway to the Magnificent 7 list?
Berkshire Hathaway Versus Alphabet
The argument for including Berkshire Hathaway isn’t as far-fetched as it may seem. When you look at the valuations and fundamentals of Berkshire Hathaway and compare them to some of the other Mag 7 stocks, there are a lot of similarities.
Tracey compared Berkshire Hathaway (BRK.B - Free Report) to Alphabet (GOOGL - Free Report) because Alphabet is one of the cheapest of the Mag 7 stocks.
1. Cash Rich:Berkshire Hathaway had $168 billion in cash as of Dec 31, 2023. Alphabet had $110 billion as of Mar 31, 2024.
2. Share buyback plans:Berkshire bought back $9.2 billion in 2023 and Alphabet announced an additional $70 billion for 2024.
3. Attractive P/E ratios:Berkshire Hathaway’s forward P/E is 22.1 while Alphabet’s is 23.3.
4. Attractive P/S ratios:Berkshire Hathaway’s P/S ratio is 2.4 while Alphabet’s is 6.4
Old Economy Companies in Berkshire Hathaway: Winners?
How do you value the rest of Berkshire’s portfolio in the companies it owns outright? Tracey looked at some publicly traded competitors for ideas.
1. The Sherwin-Williams Co. (SHW - Free Report)
Sherwin Williams makes paint. Berkshire Hathaway owns competitor Benjamin Moore. Sherwin Williams is not cheap. It’s trading with a forward P/E of 26. In the first quarter, sales at the consumer brand segment fell 7% as fewer homes sold and less remodeling was done.
Sherwin Williams pays a dividend, however, yielding 1%.
2. Masco Corp. (MAS - Free Report)
Masco Corp. also owns a well-known paint brand: Behr paint. But Masco did not see a restoration of volumes in the first quarter. Volumes fell 4%. Masco expects Behr paint to be down slightly in the first half of the year.
Masco is attractively priced, with a forward P/E of 17.8. Masco also pays a dividend, yielding 1.6%.
3. Armstrong World Industries, Inc. (AWI - Free Report)
Armstrong World Industries makes ceiling and wall system solutions in both residential and commercial settings, including in healthcare facilities and classrooms. Berkshire Hathaway also owns several companies that are in similar old school industries like Shaw Industries which makes flooring.
Armstrong World Industries is trading with a forward P/E of 20.3. It also pays a dividend, yielding about 1%. Armstrong World Industries is a Zacks #2 (Buy) stock.
What Else Do You Need to Know About Berkshire Hathaway Being in the Mag 7?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of GOOGL in her own personal portfolio.]
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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https://www.zacks.com/performance
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.