Is Berkshire Hathaway Inc. (BRK.B) a Buy?

Looking ahead, Loews Hotels is working to open three new units, and CNA revenues should be on the uptick as renewals after Sandy kick in. Assuming overall insurance losses at historical norms, I expect roughly 10% earnings growth annually over the next several years. This company is controlled by the Tisch family, and debt is just 25% of capital. The problem again is one of value. The stock price has been bid up so that the current PEG is 1.9. That is awfully high for a company whose fortunes are chiefly financial. I would be interested in this equity at its 52 week low of about $25 per share–but count me out at the current price of around $34.

One impressive conglomerate is Dow component United Technologies Corporation (NYSE:UTX). It struggled in 2012 due to restructuring costs related to its purchase of Goodrich late in 2011. But 2013 shows plenty of promise. Pickups in the domestic construction business will aid the company’s Carrier HVAC and Otis Elevator Units. Growth in air traffic will greatly aid United Technologies Corporation (NYSE:UTX)’s vast aerospace business. And while the Sirkorsky helicopter division operates in a niche market, it is the dominant player in that market to the tune of $7 billion a year. I look for 2013 earnings on the high side of management’s stated $5.85 to $6.15 per share for the year. The company is using its ample generated cash both to pay down debt from the Goodrich deal, and buy back shares. All in all, United Technology, with its 2.3% dividend, should appeal to many holders as a core, long-term choice.

Conclusion

Berkshire Hathaway Inc. (NYSE:BRK.B)’s stock has gotten ahead of itself. Investors should only consider buying the stock in the mid-$90 range given today’s book value. Investors should consider CNA Financial if it dips down toward its 52-week low of about $25, but should avoid it otherwise. Similarly, Loews looks good around its 52-week low of $38. United Technologies Corporation (NYSE:UTX) is a core long-term buy with its 2.3% dividend.

The article Berkshire Hathaway: The Best of the Conglomerates? originally appeared on Fool.com and is written by Bill Edson.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.