BRKA

The Electric Vehicle (EV) Market Is Hot and Getting Hotter

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Image Shown: A look at Tesla Inc’s new Gigafactory factory (Model Y body shop) in Shanghai, China. Image Source: Tesla Inc – Third Quarter of 2020 IR Earnings Presentation By Callum Turcan The electric vehicle (‘EV’) market is hot and getting hotter. Aided by a combination of supportive government policies such as subsides for EVs (purchase tax credits, manufacturing tax credits), plans to ban the sale of automobiles powered by internal combustion engines (‘ICE’) in the coming years, and shifting consumer preferences (households preferring to appear “green”), the long-term outlook for EV sales is quite bright. Tesla Inc (TSLA) is the posterchild of the EV boom given its first-mover advantage, though competitive headwinds are rising. Legacy auto manufacturers are looking … Read more

Our Thoughts on Berkshire Hathaway’s Latest Annual Report

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Image Shown: Shares of Berkshire Hathaway Inc Class B stock have been on an upward climb since June 2020 with room for additional capital appreciation upside. The top end of our fair value estimate range for BRK.B sits at $275 per share. By Callum Turcan We include Berkshire Hathaway Inc (BRK.A) (BRK.B) Class B shares in the Best Ideas Newsletter portfolio and continue to be enormous fans of Warren Buffett. Berkshire Hathaway reported fourth quarter 2020 earnings on February 27 which saw the firm’s ‘operating earnings’ (a non-GAAP metric that better reflects Berkshire’s underlying financial performance) surge higher by 14% year-over-year aided by strength at its ‘railroad, utilities and energy’ and ‘other businesses’ operating segments. However, Berkshire’s operating earnings for … Read more

The Price-to-Earnings Ratio Demystified

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By Brian Nelson, CFA The Price-to-Earnings Ratio Demystified The price-to-earnings (P/E) ratio seems so easy, right? The trailing P/E is just the price per share of the stock divided by the annual net diluted earnings per share the firm generated in its last fiscal (calendar) year. The forward P/E is the price per share of the stock divided by next fiscal (calendar) year’s annual net diluted earnings per share of the firm (or the forward 12-month period). The P/E ratio is probably the most well-known measure to help investors compare how cheap or expensive a firm’s shares are, as stock prices, for lack of a better term, are arbitrary. For example, stocks such as Warren Buffett’s Berkshire Hathaway (BRK.A), which … Read more