Whitney Tilson, the brains behind T2 Partners, is bullish on Berkshire Hathaway, the holding company headed by Warren Buffett.
In a recent presentation, Tilson laid out an investment thesis arguing that Berkshire was worth $178,400 per share. He also noted that the company should be worth $200,000 a year from now.
Photo: T2 Partners LLC
Berkshire Hathaway closed at $117,434 today. If Tilson’s right, Berkshire shares offer a 70% return in just 12 months.
Here are the catalysts he lists that could ignite a rally in the stock.
- Continued earnings growth of operating businesses, especially as $1+ billion of pre-tax earnings from Lubrizol are incorporated
- New equity investments
- Additional cash build
- Meaningful share repurchases
- Eventually, Berkshire could win back a AAA rating (not likely in the near term)
- Potential for more meaningful acquisitions and investments – If there’s a double-dip recession, this becomes more likely
Tilson’s argument for Berkshire is worth reviewing.