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Berkshire Hathaway Inc (NYSE:BRK.B)
Shiller P/E Ratio
25.23 (As of Today)

As of today, Berkshire Hathaway Inc's current share price is $151.35. Berkshire Hathaway Inc's E10 for the quarter that ended in Sep. 2014 was $6.00. Berkshire Hathaway Inc's Shiller P/E Ratio for today is 25.23.

BRK.B' s 10-Year Shiller P/E Ratio Range
Min: 11.21   Max: 35.34
Current: 25.21

11.21
35.34

During the past 13 years, Berkshire Hathaway Inc's highest Shiller P/E Ratio was 35.34. The lowest was 11.21. And the median was 20.62.

BRK.B's Shiller P/E Ratiois ranked higher than
85% of the 194 Companies
in the Global Insurance - Diversified industry.

( Industry Median: 25.21 vs. BRK.B: 25.21 )

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.

Berkshire Hathaway Inc's adjusted earnings per share data for the three months ended in Sep. 2014 was $1.947. Since most companies do not have as long as 10 years history, here we use 6 years to calculate. Add all the adjusted EPS for the past 6 years together and divide 6 will get our E10, which is $6.00 for the trailing six years ended in Sep. 2014.


Definition

For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, the Shiller P/E is also called PE10.

The Shiller P/E was first used by professor Robert Shiller to measure the valuation of the overall market. The same calculation is applied here to individual companies.

Berkshire Hathaway Inc's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=151.35/6.00
=25.23

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Berkshire Hathaway Inc's E10 for the fiscal year that ended in Dec13 is calculated as:

For example, Berkshire Hathaway Inc's adjusted earnings per share data for the three months ended in Sep. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Sep. 2014*CPI of Current
=1.968/238.031*235.51
=1.947

Since most companies do not have as long as 10 years history, GuruFocus uses 6 years to do the calculation.

Current CPI = 235.51.

Berkshire Hathaway Inc Quarterly Data

201206201209201212201303201306201309201312201403201406201409
per share eps 1.3171.6611.9302.0841.9342.1522.1252.0032.7221.968
CPI 229.478231.407229.601232.773233.504234.149233.049236.293238.343238.031
Adj_EPS 1.3521.6901.9802.1091.9512.1652.1471.9962.6901.947
200912201003201006201009201012201103201106201109201112201203
per share eps 1.3791.5900.8371.2701.8590.6421.4500.9661.2921.376
CPI 215.949217.631217.965218.439219.179223.467225.722226.889225.672229.392
Adj_EPS 1.5041.7210.9041.3691.9980.6771.5131.0031.3481.413
200812200903200906200909
per share eps 0.053-0.6931.4861.461
CPI 210.228212.709215.693215.969
Adj_EPS 0.059-0.7671.6231.593

Add all the adjusted EPS together and divide 6 will get our E10.


Explanation

Compared with the regular P/E ratio, which works poorly for cyclical businesses, the Shiller P/E smoothed out the fluctuations of profit margins during business cycles. Therefore it is more accurate in reflecting the valuation of the company.

If a company has consistent business performance, the Shiller P/E should give similar results to regular P/E.

Compared with the P/S ratio, the Shiller P/E makes the comparison between different industries more meaningful.


Be Aware

The Shiller P/E assumes that over the long term, businesses and profitability revert to their means. If a company’s business model does not work in the future compared with the past, the Shiller P/E and P/S ratio will give false valuations.


Related Terms

P/E Ratio, P/B Ratio, P/S Ratio, Price-to-Free-Cash-Flow ratio, E10


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Berkshire Hathaway Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
ShillerPE 29.0722.6322.9422.1715.1015.4617.3516.1318.4022.64

Berkshire Hathaway Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
ShillerPE 17.2717.9718.4020.4521.7122.1322.6422.5321.7523.01
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