According to the All-in-One Screener, a Premium feature of GuruFocus, the equity portfolio of Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) contains three stocks that are trading below the Peter Lynch earnings line as of Thursday: U.S. Bancorp (USB, Financial), DaVita Inc. (DVA, Financial) and Globe Life Inc. (GL, Financial).
Buffett, one of the most respected and successful investors in history, studied under Benjamin Graham at Columbia University. The “Oracle of Omaha” built Berkshire from a small textile company into a $700 billion insurance conglomerate based on current market cap statistics. According to the Bloomberg Billionaires Index, Buffett’s net worth of approximately $117 billion as of Tuesday propelled him into the top five richest people in the world.
As of December 2021, Berkshire’s $330.95 billion 13F equity portfolio contains 44 stocks with a quarterly turnover ratio of 1%. The top three sectors in terms of weight are technology, financial services and consumer defensive, representing 49.26%, 29.28% and 11.56% of the equity portfolio.
GuruFocus’ “Peter Lynch + Warren Buffett (Trades, Portfolio)” screener lists the companies in Berkshire’s equity portfolio that have high profitability and are trading below Lynch’s earnings line. The legendary Fidelity Magellan Fund manager devised a quick way to measure a stock’s valuation by comparing its share price with an earnings line set at 15 times earnings per share.
U.S. Bancorp
Berkshire owns 126,417,887 shares of U.S. Bancorp (USB, Financial), dedicating 2.15% of its equity portfolio to the holding.
Shares of U.S. Bancorp traded around $52.77, approximately 10.36 times its earnings per share. The stock’s price-earnings ratio is near a one-year low while its price-to-GF Value ratio of 0.92 shows fair valuation based on Thursday’s price.
GuruFocus ranks the Minneapolis-based bank’s profitability 7 out of 10 on several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 7 and a return on assets that outperforms more than 77% of global competitors.
Other gurus with holdings in U.S. Bancorp include Chris Davis (Trades, Portfolio)’ Davis Select Advisors and Jeremy Grantham (Trades, Portfolio)’s GMO.
DaVita
Berkshire owns 36,095,570 shares of DaVita (DVA, Financial), giving the position 1.24% weight in its equity portfolio.
Shares of DaVita traded around $111.23, approximately 12.53 times its earnings per share. The stock is fairly valued based on Thursday’s price-to-GF-Value ratio of 0.99.
GuruFocus ranks the Denver-based dialysis service company’s profitability 10 out of 10 on several positive investing signs, which include a four-star business predictability rank, a high Piotroski F-score of 8 and profit margins and returns that are outperforming more than 70% of global competitors.
Other gurus with holdings in DaVita include Larry Robbins (Trades, Portfolio)’ Glenview Capital Management and Jim Simons (Trades, Portfolio)’ Renaissance Technologies.
Globe Life
Berkshire owns 6,353,737 shares of Globe Life (GL, Financial), giving the position 0.18% equity portfolio weight.
Shares of Globe Life traded around $96.08, approximately 13.31 times its earnings per share. The stock is modestly undervalued based on Thursday’s price-to-GF Value ratio of 0.88.
GuruFocus ranks the McKinney, Texas-based insurance company’s profitability 8 out of 10 on several positive investing signs, which include a five-star business predictability rank and a net profit margin that outperforms more than 76% of global competitors.
Other gurus with holdings in Globe Life include Ken Fisher (Trades, Portfolio)’s Fisher Investments and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates.
