저자: Daniel · 외국인
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결론: 버크셔 해서웨이는 자사주를 계속 매입 중이나 2023년 1분기 순매도 전환으로 대형주 투자 매력은 낮게 보며, 현 주가($300 내외)는 내재가치 대비 할인 상태로 판단됨. [버크셔 자사주 매입과 자본배분] 1분기 자사주 매입 약 45억 달러, 2023년 전체 약 80억 달러 예상, 2022년 약 270억·2021년 약 240억 달러였음. 버핏이 1분기 주식 순매도 100억 달러(매도 130억, 매수 30억)로 2022년 1분기 약 400억 달러 순매수와 대비됨. [현금·채권과 금리] 단기 미국채 4~5% 수익률로 현금 보유가 유리하다고 봄. 미국 국채 1,000억 달러 이상 보유, 채권 순매수 약 70억 달러. 부채한도 분쟁 등 디폴트 리스크에도 국채를 늘림. [사업 실적] 보험 세전영업이익 약 20억 달러 증가(GEICO 중심, 일회성 이익 포함), 투자수익 증가로 연간 약 40억~50억 달러 추가 이익. 철도·에너지·제조 등 비보험 부문은 전년 대비 감소, 핵심 영업이익 연환산 약 5억 달러 감소. 세전 현금흐름 약 400억 달러 추정. [포트폴리오 리스크] 1분기 투자이익 340억 달러는 애플 주가 상승에 따른 미실현 이익이며, 애플 포지션 약 1,500억 달러 규모로 변동성 큼. [밸류에이션·전망] 시가총액 약 7,000억 달러, B주 $327 기준 정상화 이익 450~500억 달러 가정 시 S&P500 대비 약 25% 할인. 5년 후 정상화 이익 약 600억 달러 가능, 자사주 소각 효과 연 3~4%. 주가는 중단기 중단위~두자릿수 상승 가능성 언급, 실행력 약화 시 하방 위험. [투자 시사점] 버핏이 $300 부근을 매력적으로 본다는 점과 현금 선호가 대형주 매력 저하 신호로 해석됨. 신규 투자는 버크셔 대비 기대수익을 비교해야 함. [출연자 전망] 버크셔 주가는 현 수준 대비 중기 상승 가능성 있으나 보수적 전망. 영상 내 자체 유료 서비스 광고 포함.
다듬은 글
Warren Buffett's Berkshire Hathaway continues to actively buy back its own shares. This is really interesting, because Warren Buffett is one of the greatest investors of all time. His career has lasted for decades , providing an annual return of about 20% . In the first quarter, he rapidly increased the volume of Berkshire share buybacks.
This means that a skilled capital allocator says, "I prefer to own a larger share of my own company because it meets my criteria." Is this an opportunity for investors to join in and say, "If Buffett thinks the price is attractive, maybe I should buy too"? What is the range of possible returns? What will drive share price growth in the future?
I will talk about this and more . If you like educational videos about investing, please don't forget to click the subscribe button. You are watching Unrivaled Investing. So let's begin. You see about $4.5 billion in repurchases in the first quarter: about a million Class B shares in January, just under a million in February, and a rapid increase to 4.5 million in March.
Interestingly, that's about 310 million shares, closer to 300. So, he clearly finds a price of about $300 per Class B share much more attractive. It's a little higher now, but it gives a guideline of where Buffett thinks the price should be to meet his requirements. So, $4.5 billion in buybacks for the first quarter versus about $8 billion for the whole of 2023.
We are on track to significantly exceed last year's redemption figures. It's also interesting when you look at previous years when he was buying back huge amounts of shares. About 27 billion the year before, about 24 billion the year before that. So, Berkshire Hathaway continues to "eat" its own shares.
When we look at Berkshire's first quarter results, we see about $5 billion in free cash flow. This is a little better than last year. What did he do with this significant cash flow? It is worth remembering that these funds are distributed among dozens of different business segments. Based on this, one can clearly understand Buffett's actions.
You don't necessarily see exactly what stocks he's buying. There's a slight delay there, and as soon as it comes out I'll post it, but you can already tell what exactly he finds attractive. So, here's the result: cash inflows were $5 billion . In fact, he only bought $3 billion worth of shares, but sold $13 billion worth during that quarter.
So he was a net seller of $ 10 billion worth of stocks . In my opinion, this is a clear signal: it says that there are simply no large companies worth looking at for Berkshire Hathaway right now . That's in stark contrast to the first quarter of last year, when it bought about $40 billion worth of shares.
So last year's signal is radically different from this year's. This year, he is actually selling his shares. If you look at his bond portfolio, he was a net buyer of about $7 billion . This is an important signal not only about stocks, but also that with short-term US Treasury bonds yielding 4–5%, he prefers cash, where he can earn more than four and a half percent.
I personally hold my account with Interactive Brokers, and it says : I can get a better return by just holding cash, and I'd rather wait for profitable opportunities. And he doesn't see them now . On the contrary, he is reducing the share of stocks in the portfolio and buying more Treasury bonds, despite the risks of default due to disputes over the US debt ceiling.
He's like saying, "You know what? They'll handle this task." At least, that's what you can judge from what he does with his briefcase. And by the way, it's better to get 4-5% from treasury bonds than to buy stocks that he's not sure about . In addition, he spent about 78 billion to increase his stake in Traveling Jay, one of his subsidiaries, as well as 4.5 billion to buy back his own shares.
So, you can quickly understand how he allocates capital at Berkshire Hathaway. And that's really interesting. I mean, he has a lot of cash. That's a huge amount in Treasury bonds he had at the end of the first quarter. He held over a hundred billion in US Treasury bonds alone. You know, add another, say, 25-26 billion in cash, whether it's insurance or various other industrial subsidiaries.
So, he's better off hoarding more cash than adding $ 300 billion to his stock portfolio . A very important indicator. Now, if you look at their base income, the picture is actually mixed. If we look at insurance, in terms of operating profit before tax, it grew by about $2 billion. This was driven largely by GEICO, their auto insurance business.
They clearly stated this during the call, Ajit Jain who runs the insurance. He made it clear that GEICO is currently going through a review process for some of its policyholders, effectively raising prices, which may prevent them from growing business in the near term as they look to cut unprofitable operations.
This period also included one-time profits from pre- insurance and underwriting, which proved to be beneficial for them. So there is a certain one-time profit aspect associated with GEICO. They don't expect significant growth in the near term, but they do expect the business to become more profitable.
So we see a significant improvement in profitability. This is a clear priority for management, as Geico needs to be a significantly more profitable business. But the main driver of their increasingly profitable insurance business comes down to a key concept: you're now getting a lot more for your cash.
And that means he gets a billion dollars more in investment income, primarily due to higher interest rates. And this is such a great position. I mean, just think about it. If you have a hundred billion dollars, just rounding the numbers, a hundred billion dollars in cash and in short-term bonds, a few years ago the yield was close to zero.
Now, you can easily get an extra $4-5 billion a year just by holding it in short-term bonds. So this is a very advantageous position for Berkshire. You know, this extra money, this extra investment income. If you look at their non-insurance operating segments -- railroads, Berkshire Hathaway Energy, which I mentioned, manufacturing, which they acquired -- most of them are actually down year- over-year.
You saw significant one-time costs in the energy sector related to the 2020 wildfires , but overall the results were not very impressive. I think Buffett even mentioned during the meeting that he expects earnings to decline from core business segments, but overall earnings should increase given the combination of portfolio, investments, and higher interest rates that provide returns.
So if you look at this : you see strong results in insurance, largely due to higher interest rates. Their core operating business actually declined by about half a billion dollars on an annualized basis. So overall, even before taking into account any investment gains, their core operating profit increased by about $1.5 billion.
That's about $10 billion per quarter. So the way to look at it is to value their businesses, the cash flows coming in, it's about $40 billion before taxes. This is an important indicator. We will use it a little later when we analyze Berkshire's valuation. And then there's this rather uncertain aspect when you look at the changes in their portfolio that are reflected in the income statement through investment and derivative income and expense.
You know, in one period it could easily be a loss of tens of billions of dollars. In other periods, if stock prices rise, it can be a huge profit. This quarter, they made $34 billion in profit from their portfolio. But again, this is not fully recognized profit. That is, it is reflected in the reporting, but not implemented.
I mean, they're not selling these investments, but that's mostly because Apple stock is up, you know, like 20% year-to-date or through the first quarter of 2023. And considering that Apple—that's about a $150 billion position for him as of the first quarter, that's a very significant share that has a huge impact.
So, this profit during the first quarter was mostly a result of Apple's stock price rising, but again , it's not selling them . This is not the $40 billion in pre- tax cash we are talking about here. This is just some "noise" due to the change in the value of the portfolio in any given period. OK. So what's next for Berkshire?
First, a quick disclaimer : this is not financial advice. I recently started buying a stock that I believe has over 300% upside potential, and which I tell my followers about at unrivaledinvesting.com. We also offer training videos and access to an exclusive Discord server for annual subscribers. So, once again , this is unrivaledinvesting.com.
When we look at Berkshire, the different components are pre- tax income, which as I mentioned is around $40 billion, and you can see that based on both the latest reports and previous years. Next, we look at their investment portfolio, which is about $500 billion. This is a combination of their stock portfolio of over $300 billion, as well as their cash and short-term bonds worth about $200 billion .
So, looking at a portfolio with a total value of $500 billion , what would be the realized returns that can be generated from that portfolio over time? And also think about it from a tax perspective : what potential after-tax profits can you expect? Personally, I'm conservative about this, so I expect high single-digit percentage after- tax returns, at least for this portfolio.
So, if pre-tax profit is about $40 billion and the portfolio's after- tax return is 7-8%, then as a result they generate a normalized after -tax profit of about $45-50 billion , taking into account the portfolio's volatility. This is what I am currently counting on; maybe the numbers will be a little higher.
You may have different assumptions, but even a small change in portfolio valuation will have a significant impact on what you think the normalized return might be. Apple, for example, will have a huge impact on long-term value creation here at Berkshire. So, considering Berkshire with a market cap of around $700 billion , that implies a price of $327 per Class B share.
So, given a normalized profit of between $45 billion and $50 billion . This suggests that Berkshire is trading well below the S&P 500 and other major U.S. indices, which trade at a multiple closer to 20. That's how things are. Berkshire is trading at a discount, one might say, of almost 25% to the market.
It's no wonder Warren Buffett sees more value in his own business, where he has more confidence in capital allocation, than, say, in a broader index about which he says, "Hey, it's more expensive, and I don't even control the outcome of this free cash flow." And perhaps the growth prospects aren't even that good because capital allocation may not be as efficient .
So what will be the driving force behind this in the future? You have organic growth. This is not even taking into account the cash that can be spent on buying new companies, but only considering the growth rate of these businesses. As I mentioned, there were some profitability challenges in the first quarter, but overall, 4–6% growth for such a large business is a good result.
This is largely tied to global GDP, particularly US GDP. And what will be the final multiplier? Let's assume it will remain at the current level, say, in the range of 14 to 18 values of some normalized returns. So, in 5 years, normalized profit could approach 60 billion, plus or minus . And you might say, “Daniel, wait a minute, do n’t they have $20 billion to $ 30 billion in free cash flow a year that they can use to grow profits faster than organically ?” I factor this into my calculation of annualized value appreciation, which I assume is effectively channeled into share buybacks.
Maybe it's about 4% per year overall. If you spend $20–30 billion per year of free cash flow on buybacks for a company with a market capitalization of $700 billion, that's roughly what it looks like. This gives a 3–4% annual incremental increase in the value of your shares. Here's how I calculate it.
Keep in mind that this is a hypothetical valuation model. Of course, Berkshire Hathaway's stock price could be much higher or lower, but the way I look at it is this: over the next 5 years, this company will continue to generate an incredible amount of cash. So you have these huge cash reserves. You have so many different businesses that are just generating a ton of free cash flow.
And you also have this huge portfolio of assets. Right now, you know, he's heavily focused on Apple stock. Therefore, you should have your own opinion on this. I...I'm a little cautious. I am more cautious about Apple than Warren Buffett. But I look at it and I think I wouldn't be surprised if Berkshire Hathaway stock grows over the next five years somewhere between mid-single digits to low double digits , and I've suggested a framework for how to think about it .
You know, obviously a lot will depend on fundamentals. If their execution is much weaker, if they don't deliver, say, 5% organic growth, or if sentiment becomes significantly worse and the multiple is lower in 5 years, it could certainly hurt the business. But I think the key aspect to consider is: first, Warren Buffett finds the stock attractive at around $300 a share.
This is slightly below the current trading price. So, this is a key point to take into account. The second point is that for any new investment, an investor should consider: you're getting an incredibly diversified basket of businesses managed by some of the best capital allocation professionals in the world, and the potential rate of return you're looking at is, let's say, high single digits.
So any new investment should be compared to this to say, "Is the investment I'm willing to make worth putting significantly more money into my portfolio compared to Berkshire Hathaway?" Using Berkshire Hathaway as a benchmark, you say, "Well, this is just a great company, why not buy Berkshire?" And you think, “Well, this other business must have such impressive growth that it will provide 200, 300%, or even 500% growth potential over time.
" Maybe because it's a smaller business, or because it's growing faster, has a cheaper valuation, or other similar dynamic metrics." And another key point, the final element that I think investors should know and think about right now, is that Buffett has been reducing his stock portfolio recently. He favors bonds, which only reinforces the idea that he is currently accumulating cash, signaling to me personally that better deals can be found in the future.
You know, when the world's greatest investors say, "You know what, I'd rather wait." I would rather hold cash and earn a good income from it than buy stocks that may be overvalued or indicate an approaching recession, because then I can get better terms with lower profits from these companies. So, I think that's a clear signal to me that Warren Buffett is not trying to guess the perfect moment in the market.
That's not the point . It simply estimates the current value. He prefers to sell stocks than buy them. And this is a completely clear signal. He would rather get that four or five percent in cash. If this video was helpful to you , please don't forget to click the subscribe button.
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