Is Berkshire Hathaway Inc. (BRK.B) Trading at a Major Discount?

Investment firm Trapeze Asset Management, founded by Herbert and Randall Abramson, also discussed Berkshire Hathaway Inc. (NYSE:BRK-B) in its third-quarter investor letter, saying:

“Berkshire Hathaway continues to add to its captive owned company segment. The recent $32 billion Precision Castparts acquisition should prove accretive to 2016 earnings. Importantly, this illustrates the continued shift to direct ownership of high quality businesses. The stock picking expertise of Buffett and Munger is no longer the thesis as the 100% owned insurance, rail and other first class assets now make up the majority of our valuation estimate, which is above $250,000 per Class A share and rising.”

This means that both the class A and class B shares of Berkshire Hathaway are currently trading at a huge discount to intrinsic value despite having gained 7% over the past month. Berkshire Hathaway Inc. (NYSE:BRK-B)’s class B common stock is down by 6% over the past 52 weeks.

What does the smart money think about Berkshire Hathaway Inc. (NYSE:BRK.B)?

At Q4’s end, a total of 75 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 9% rise from the end of the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes meaningfully (or had already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Michael Larson’s Bill & Melinda Gates Foundation Trust has the number one position in Berkshire Hathaway Inc. (NYSE:BRK.B), worth close to $9.82 billion, comprising 58.9% of its total 13F portfolio, with those shares being donated to the Trust by Buffett himself over the years. On the Bill & Melinda Gates Foundation Trust’s heels is Eagle Capital Management, managed by Boykin Curry, which holds a $1.64 billion position; 6.7% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions contain Tom Russo’s Gardner Russo & Gardner, D E Shaw, and Ken Fisher’s Fisher Asset Management.