Long

Berkshire Hathaway - Potential 20% Upside?

Updated

Is the most famous investor in the modern history and his international conglomerate able to update historic highs before US economy spirals into recession?
Let's look at it in more detail.

Fundamental indicators:

Revenue and Profits - demonstrated consistent long-term earnings growth over the past 10 years except 2020
Profit margin - not consistent and varies from 10% to 20%, 2021 was with the highest 28%
P/E - 8.4x which is considerably lower than the current S&P500 ratio
Liabilities - no problems with debt

Technical Analysis (Elliott Waves):

Following the correction of March 2020 shares of Berkshire Hathaway have enjoyed similar growth cycle as S&P500 with 120% gains
This bull run was formed by an impulse where waves 1 to 4 have been completed and wave 5 is currently developing
Wave 4 is clearly identifiable as a lengthy and flat Running Correction that lasted between May and November 2021
The final wave of the impulse is quite choppy with lots of crossings which often indicates the development of an Ending Diagonal pattern with a structure of 3-3-3-3-3
If this is the case then waves 1 to 3 have been established and wave 4 is in the process of completion
Once this zigzag-like correction is over we can observe another zigzag to update the historic highs and potential gains for investors of 20%

What do you think about and its short term prospects?
Also let me know if you would like to see other stocks, indices, Forex or Crypto analysed using Elliott Waves.

Thanks

Comment

Update to the idea:

vitalalyt

In search of the optimal signals

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