Black Bear Value Partners, an investment management firm, published its first quarter 2023 investor letter, a copy of which can be downloaded here. Black Bear Value Fund returned +0.8% in March and +2.9% YTD, at the same time the S&P 500 returned +3.7% and +7.5% and the HFRI Index returned +1.2% and +4.5% in March and YTD, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Black Bear Value Partners highlighted stocks like Berkshire Hathaway Inc. (NYSE:BRK-B) in the first quarter 2023 investor letter. Headquartered in Omaha, Nebraska, Berkshire Hathaway Inc. (NYSE:BRK-B) engages in insurance, freight rail transportation, and utility businesses. On July 3, 2023, Berkshire Hathaway Inc. (NYSE:BRK-B) stock closed at $342.00 per share. One-month return of Berkshire Hathaway Inc. (NYSE:BRK-B) was 4.08%, and its shares gained 23.24% of their value over the last 52 weeks. Berkshire Hathaway Inc. (NYSE:BRK-B) has a market capitalization of $747.198 billion.
Black Bear Value Partners made the following comment about Berkshire Hathaway Inc. (NYSE:BRK-B) in its first quarter 2023 investor letter:
“Below is the rough Berkshire Hathaway Inc. (NYSE:BRK-B) on-a-napkin valuation. Again, this is a rough exercise.
Cash of ~$79,000 per class A Share o Down/Base/Up marks cash at book value to an 11% premium or $87,000
Investments based on December prices ~$252,000 per class A share o Presume a range of stock prices that result in:
Down = $225,000 per class A share (-11%- assumes portfolio is overpriced)
Base = $294,000 per class A share (+17%)
Up = $382,000 per class A share (+51%)
Operating businesses that should generate ~$18,000 of pre-tax income per Class A share
Down = 9x = $168,000 per share – equates to ~8% FCF yield Base = 11x = $205,000 – equates to ~7% FCF yield
Up = 12.5x = $233,000 – equates to ~6% FCF yield
Overall (vs. $469,000 at quarter end) o Down = $480,000 (+2%) o Base = $586,000 (+25%)
o Up = $702,000 (50% underpriced)
We added a short of Apple vs. the Berkshire position. Apple has become a large part of the BRK business and wanted to limit our exposure to that investment as it seems expensive.
Going forward I expect Berkshire to compound at above average returns from this price.”
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Berkshire Hathaway Inc. (NYSE:BRK-B) is in 15th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 108 hedge fund portfolios held Berkshire Hathaway Inc. (NYSE:BRK-B) at the end of first quarter 2023 which was 110 in the previous quarter.
We discussed Berkshire Hathaway Inc. (NYSE:BRK-B) in another article and shared the top stock picks in Bill Gates’ most recent portfolio. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
