Berkshire Hathaway Inc. (BRK-B): A Bull Case Theory 

We came across a bullish thesis on Berkshire Hathaway Inc. on Value investing subreddit by BuffersAndBeta. In this article, we will summarize the bulls’ thesis on BRK-B. Berkshire Hathaway Inc.’s share was trading at $506.65 as of December 2nd. BRK-B’s trailing and forward P/E were 16.26 and 23.09 respectively according to Yahoo Finance.

Berkshire Hathaway Inc., through its subsidiaries, engages in the insurance, freight rail transportation, and utility businesses presents a compelling long-term investment opportunity, and the current market environment offers an attractive entry point. The company’s shareholder equity has grown substantially, reaching approximately $698 billion, while its insurance float has expanded to $176 billion, and cash and cash equivalents now total $386 billion. These metrics highlight Berkshire’s remarkable financial strength and the scale of its capital deployment capacity.

Despite this, the market has consistently underpriced the stock this year, influenced by the narrative that the company is missing out on AI-driven growth—a pattern of bias that has recurred throughout Berkshire’s history. Adjusting for the value of the float, if roughly 50% of the float is treated as assets, the company’s price-to-book ratio sits near 1.3x, historically a favorable entry level for long-term investors. The combination of substantial capital, disciplined insurance operations, and a history of successful capital allocation underpins the investment thesis.

That said, certain risks warrant careful consideration. Greg Abel, while experienced, has yet to match the legendary capital allocation of Warren Buffett and Charlie Munger, raising potential concerns about future deployment decisions. Additionally, the concentration of Berkshire’s portfolio introduces tail risk, as errors in capital allocation—even by top managers—can lead to significant long-term losses.

Overall, for investors willing to take a patient, long-term view, Berkshire’s strong balance sheet, robust float, and historically favorable valuation metrics create a compelling case to begin accumulating shares over the next 12–18 months, with substantial upside potential relative to current market pricing.

Previously we covered a bullish thesis on Berkshire Hathaway Inc. (NYSE:BRK-A) by FluentInQuality in December 2024, which highlighted the company’s diversified portfolio, strong cash flow, and Buffett’s disciplined investing. The stock has appreciated approximately 10.97% since our coverage as the thesis played out. BuffersAndBeta shares a similar perspective but emphasizes BRK.B’s underpricing, robust equity, and potential entry point, while noting management and concentration risks.

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Disclosure: None.