For all the adulation he receives, Warren Buffett isn't getting credit where it arguably counts the most: his company's share price. Berkshire Hathaway's Class A shares trade around $128,000 a share. While that's a big number, it's less than 1.2 times the company's book value of $111,718 per share, as of Sept. 30. Berkshire's Class B shares (worth 1/1,500 of the A) fetch around $85.
Berkshire looks appealing because the stock's price/book ratio is near the bottom of its 10-year range and just above a threshold of 1.1 times book at which Buffett has said the company stands ready to repurchase shares. Berkshire (ticker: BRK.A) is sitting on $42 billion of cash—$11.5 billion in the holding company and the rest in its insurance affiliates.
Related previous post: Berkshire's book value and share repurchases