Berkshire Hathaway

Methodology

This method has very limited applicability for Berkshire Hathaway given its conglomerate structure spanning insurance, railroads, utilities, manufacturing, and investment portfolio. The company's reported earnings include unrealized gains/losses on equity investments that distort economic performance. For Berkshire, operating earnings excluding investment mark-to-market provide better baselines, though even this requires sumof-the-parts analysis across diverse businesses rather than simple fair value formulas.

Methodology

Traditional PEG analysis is problematic for Berkshire given the holding company structure where earnings mix shifts between operating businesses and investment portfolio performance. Growth rates are meaningless when much of earnings come from volatile equity market movements. For Berkshire, price-to-book value relative to historical ranges and sum-of-the-parts valuation of operating subsidiaries plus investments provides better insight than earnings-based PEG ratios.

Methodology

Berkshire Hathaway does not pay a dividend, with Warren Buffett believing capital is better deployed in acquisitions and share buybacks. The PEGY is not applicable without a dividend. For Berkshire investors, valuation focuses on book value growth, opportunistic share repurchases below intrinsic value, and Warren Buffett's capital allocation track record rather than traditional income metrics.