Tuesday, June 30, 2009

KBW Berkshire Report

We are initiating coverage of Berkshire Hathaway Inc. (Berkshire) with an Outperform rating. Berkshire is a myriad collection of high quality businesses, particularly in insurance and reinsurance, with attractive long-term growth prospects. Despite negative marks in its derivatives portfolio, the recent global financial turmoil has left Berkshire standing tall as one of the world’s few financially sound institutions. With attractive future prospects driving off a bedrock of current strength, we view the shares’ current valuation, just 1.3x book value, as attractive.