Warren Buffet is well know for his disciplined, value-based approach to investing. With the recent declines in equity markets, Berkshire Hathaway Inc. (NYSE: BRK/A) may be looking to aggressively deploy its $30 billion in cash to increase its equity holdings, or to purchase entire companies outright.

Most observers of Berkshire understand that it is a collection of diverse businesses participating in numerous industries. Users of Revere are able to gain further insight into the detailed industry sectors which Berkshire competes, and can quickly identify the peer competitors in every instance.

Three industry sectors in which Berkshire Hathaway has numerous subsidiaries are: Consumer Apparel and Accessories, where Berkshire subsidiaries include Ben Bridge Jeweler, Borsheims, and Fruit of The Loom; Insurance and Reinsurance, where Berkshire subsidiaries include: GEICO, General Re, and National Indemnity; Industrial Machinery and Construction Materials, where Berkshire subsidiaries include: Shaw Industries, The Marmon Group, and The Scott Fetzer Companies.

Buffest has publicly stated that his ideal investments are in companies at low valuation multiples who employ modest leverage. Peer group companies in the above industry sectors fitting these criteria include:

Consumer Apparel and Accessories
Fossil, Inc. (Nasdaq:FOSL, MktCap:$1.8B, P/E:13, Debt/Equity:0.01)
Movado Group, Inc. (NYSE:MOV, MktCap:$550M, P/E:10, Debt/Equity:0.14)
Sketchers USA, Inc. (NYSE:SKX, MktCap:$820M, P/E:10, Debt/Equity:0.02)

Insurance and Reinsurance
American National Insurance (Nasdaq:ANAT, MktCap:$2.3B, P/E:10, Debt/Equity:0.03)
Axis Capital Holdings Limited (NYSE:AXS, MktCap:$4.6B, P/E:4, Debt/Equity:0.09)
Everest Re Group, Ltd. (NYSE:RE, MktCap:$5.1B, P/E:10, Debt/Equity:0.21)

Industrial Machinery and Construction Materials
Apogee Enterprises, Inc. (Nasdaq:APOG, MktCap:$500M, P/E:11, Debt/Equity:0.25)
Lincoln Electric Holdings, Inc. (NYSE:LECO, MktCap:$3B, P/E:13, Debt/Equity:0.12)
Kennametal, Inc. (NYSE:KMT, MktCap:$2.4B, P/E:14, Debt/Equity:0.21)

Sincerely,

Revere Research Team

 

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