Investment management firm, Davis Advisers, released its “Davis New York Venture Fund” 2022 annual investor letter. A copy of the same can be downloaded here. The fund’s portfolio of durable companies trades at 9.8 times forward earnings now compared to 17.8 times for the S&P 500 Index. The firm believes that holdings of the fund have significant earnings prospects in the years ahead. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Davis New York Venture Fund highlighted stocks like Berkshire Hathaway Inc. (NYSE:BRK-B) in the 2022 annual investor letter. Headquartered in Omaha, Nebraska, Berkshire Hathaway Inc. (NYSE:BRK-B) engages in insurance, freight rail transportation, and utility businesses. On March 20, 2023, Berkshire Hathaway Inc. (NYSE:BRK-B) stock closed at $301.06 per share. One-month return of Berkshire Hathaway Inc. (NYSE:BRK-B) was -0.55%, and its shares lost 13.97% of their value over the last 52 weeks. Berkshire Hathaway Inc. (NYSE:BRK-B) has a market capitalization of $659.933 billion.
Davis New York Venture Fund made the following comment about Berkshire Hathaway Inc. (NYSE:BRK-B) in its 2022 annual investor letter:
“Through its conglomerate structure, Berkshire Hathaway Inc. (NYSE:BRK-B) owns many businesses—including utilities, insurers, and industrials—that investors tend to associate with value investing. However, Berkshire Hathaway’s holding company structure allows the capital generated in slower-growth businesses to be redeployed in thoughtful acquisitions and astute investments that have allowed the whole to grow faster than the sum of its parts. Because generally accepted accounting principles (GAAP) require realized gains and losses, as well as unrealized changes in securities prices, to flow through the income statement, reported earnings are an unreliable indicator of the company’s steady growth in intrinsic value. By capturing the long-term growth in investments per share and the earnings per share (EPS) of Berkshire Hathaway’s operating businesses, Figure 7 paints a truer picture of this stalwart holding’s durable growth.
In terms of conventional risks, Berkshire is built to weather almost any conceivable financial (and literal) storm. While there is a risk that the company’s stock price may decline precipitously should Warren Buffett ever step down (or worse!), we do not consider such price declines a fundamental risk, especially given the company’s substantial liquidity and willingness to buy in shares when they are undervalued. Instead, we consider the most important risk to be the degradation of the company’s outstanding and unconventional corporate culture should successor managers be tempted to pursue the sort of financial engineering advocated by Wall Street banks, activists and other short-term investors at the expense of long-term shareholder value. We do not see any indication of this risk on the horizon but will stay active and vigilant should it ever arise.”
Berkshire Hathaway Inc. (NYSE:BRK-B) is in 11th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 110 hedge fund portfolios held Berkshire Hathaway Inc. (NYSE:BRK-B) at the end of the fourth quarter which was 104 in the previous quarter.
We discussed Berkshire Hathaway Inc. (NYSE:BRK-B) in another article and shared the list of stocks recommended by ChatGPT. In addition, please check out our hedge fund investor letters Q4 2022 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.
