📊 Berkshire Hathaway (BRK.B) – A Retail Investor’s Strategy 🏦

👋 Hello! This is Itai Levitan, and today, I’m analyzing Berkshire Hathaway (BRK.B). This stock is much more accessible to retail investors due to its lower price per share compared to BRK.A. As a result, it experiences significantly higher trading volumes. Here’s a detailed “Buy the Dip” approach, with a focus on risk management and structured trading.

💡 Why BRK.B?

• Accessibility: Lower share price compared to BRK.A makes it retail-friendly.
• Volume: Traded more frequently, ensuring better liquidity for investors.
• Stability: Solid fundamentals of Berkshire Hathaway make this an ideal stock for strategic, lower-risk trades.

📈 Weekly Chart Insights with BRK.B Technical Analysis Video

• VWAP Analysis:
  The purple line represents the 2024 VWAP, showing strong support during the consolidation after October earnings and before breaking out of key levels.

  • Multiple touchpoints confirm its relevance as a key level.
  • Price action near this level warrants close observation for entry opportunities.

• Buy Zone Setup:
  The buy zone lies slightly below the VWAP, aligning with the volume profile of the consolidation phase. This approach minimizes the risk of missing trades while ensuring a balanced entry price.

🛠️ The Levitan Method: Buy the Dip, If BRK.B Stock Prices Gets There…

• Casted Net Orders: Three buy orders at strategic price levels to avoid missing opportunities:

  1. $419.57 (50 shares)
  2. $409.57 (100 shares)
  3. $404.57 (150 shares)

• Weighted Average Entry Price: $408.74
  This balanced approach allows you to average out a favorable entry price without overexposing yourself at higher levels.

• Risk Management:

  • Stop Loss: 2.9% below the entry price, set at $396.88. This aligns with the Value Area Low (VAL) of the consolidation, further reducing risk.
  • Take Profit (TP): $456.15, representing an 11.6% gain for most of the position.

• Reward-to-Risk Ratio (R

  ):
  A compelling 4:1 ratio, balancing conservative gains with low risk.

🏃 Why Leave a Runner?

• Keep 20% of the position (or more) beyond the take-profit target.
• Objective: Ride potential gains to a new all-time high, leveraging the long-term stability of BRK.B.

🎯 Summary: Why This Approach Works

• Low Risk, High Reward: With less than 3% risk and an RRof 4:1, this is a calculated move.
• Flexibility: Options for scaling up positions or leveraging call options for added exposure.
• Stability: Berkshire’s fundamentals provide confidence in this strategic approach.

⚠️ Final Thoughts

This is a detailed journal-based trade idea for educational purposes only. Use this structure to tailor your trades and manage risks effectively. Remember, trade at your own risk and adjust position sizes based on your capital and risk appetite.

Thank you for following along, and stay tuned for more original ideas! 💡✨

🖱️ Visit ForexLive.com for more insights and trade setups.

Quick Summary: Berkshire Hathaway Financial Snapshot (Updated: 18 Nov 2024)

🔍 Key Financial Metrics:

• Market Cap: $1.02 Trillion – A massive and stable blue-chip investment.
• P/E Ratio: 9.50 – Indicates a strong valuation relative to earnings, suggesting potential value for investors.
• Forward P/E: 23.38 – Projected valuation indicates higher expectations for growth.
• PEG Ratio: 0.41 – Undervalued relative to growth, a bullish sign for growth-oriented investors.
• P/B Ratio: 1.61 – Relatively low, indicating the stock is trading near its book value.

📈 Growth Metrics:

• EPS (ttm): $49.51 – Demonstrates strong earnings.
• EPS Next Year Growth (Projected): 20.11% – Signals solid growth prospects.
• Sales Growth (Past 5 Years): 8.34% – Moderate historical revenue growth.
• EPS Growth (Past 5 Years): 93.53% – Outstanding earnings growth, reflecting strong profitability.

📊 Dividend & Financial Health:

• Debt-to-Equity: 0.22 – Indicates a strong balance sheet with low debt.
• Quick Ratio: 5.53 | Current Ratio: 5.85 – Exceptional liquidity, ensuring financial stability.

⚠️ Watchlist:

• EPS Surprise (Last Quarter): -4.32% – Slightly missed expectations, but overall profitability remains strong.

🚀 Technical Indicators:

• SMA20 (Short-Term): +2.36%
• SMA50 (Mid-Term): +2.69%
• SMA200 (Long-Term): +10.02%
  These moving averages show sustained upward momentum.

🌟 Investor Takeaway:

Berkshire Hathaway remains a solid investment with strong earnings, growth potential, and financial stability. Despite a recent minor EPS miss, the company’s fundamentals and technical indicators highlight it as a robust choice for long-term investors.

Quick Summary: Analyst Ratings for Berkshire Hathaway (BRK.B)

📋 Recent Analyst Actions:

1. May 29, 2024: Upgrade by Argus

   • Rating Change: Hold → Buy
   • Price Target: $450
   • Key Takeaway: Signals improved confidence in the stock’s potential for growth, aligning with bullish expectations.

2. July 22, 2024: Initiation by TD Cowen

   • Rating: Hold
   • Price Target: $465
   • Key Takeaway: A more cautious approach, reflecting a neutral stance at the current valuation.

🌟 Investor Insight:

• The upgrade by Argus earlier in the year highlights a shift toward optimism, supporting the idea of BRK.B as a strong buy in favorable market conditions.
• TD Cowen’s Hold rating and higher price target ($465) suggest potential for moderate gains while recommending patience at current levels.

Overall, analysts present a balanced view with a positive bias, indicating upside potential with measured risks.

Quick Summary: Berkshire Hathaway Insider Transactions (Updated: 18 Nov 2024)

🛠️ Key Takeaways:

1. Mixed Insider Activity:

   • A mix of buy and sell transactions over the past months highlights strategic adjustments by key insiders.
   • Notable buy transactions in October suggest confidence in the stock’s long-term potential.

2. Sales Focused in Early October:

   • Significant sales occurred around the $40 range, possibly indicating profit-taking or portfolio rebalancing.

3. Recent Buying Resumption:

   • Insider buys in late October reflect potential optimism, especially at levels below earlier sales.

🌟 Investor Insight:

The insider activity reflects Berkshire Hathaway’s methodical approach to portfolio management, balancing near-term liquidity needs with confidence in future growth. Recent insider buys may signal attractive valuation levels.

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