Eagle Capital’s Top 5 Stock Picks

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In this article we listed Eagle Capital’s top 5 stock picks. For our detailed discussion as well as a more comprehensive list please see Boykin Curry’s and Eagle Capital’s Top 10 Stock Picks.

5. Berkshire Hathaway Inc. (BRK-B)

Despite reducing the position by 10.34% in the third quarter, Berkshire is still 5.86% of Eagle’s overall portfolio. Berkshire Hathaway is probably the #1 stock pick among traditional value investors. Nomadic Value talked about Berkshire in its 2020 Q2 investor letter:

“We added to Berkshire Hathaway. I won’t spend too much talking about this, but BRK is as attractively priced as it’s been in some time. The press’s and FinTwit’s fascination with “Warren’s lost it” is at a cyclical peak and is complete noise. However, the valid bear argument is that BRK is too big to compound at good rates going forward, and subsidiary company performance will be weak for the next couple of years with its high exposure to air traffic (Precision Cast Parts and previously held airline stocks) and holdings in “old economy” manufacturing and retail businesses. Also, short-term there’s an unknown consequence of insurance claim payouts and/or refunds13 . We wouldn’t completely disagree with these judgments, and the optics are certainly bad when BRK doesn’t buy back shares in a quarter with a substantial sell-down. However, with a long-term lens and given the management style of BRK (conservative talk and overperform), we will likely be quite satisfied in the future – whatever that looks like. Meanwhile, we’ve gotten into a range where 30%-50% of BRK is free. Are the actual growth prospects for Berkshire this dire? Berkshire is our largest position.”

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