BRK.A: Warren Buffett’s portfolio is expected to barely beat the Dow Jones Industrials

Warren Buffett’s famous Berkshire Hathaway (BRK.A) is expected to outperform the Dow Jones Industrials by only a little bit over the next three years, according to the watch portfolios I’ve created for BRK.A and the DJ Industrials on Morningstar.com.

The three-year expected annualized return for 36 BRK.A stocks (three others aren’t rated) is 17.35%, compared with 16.46% for the 30 Dow Jones Industrials stocks.

Both portfolios are trading for an average of 82% of Moringstar’s average estimated fair value for the stocks in those portfolios.

Of its 36 stocks that are rated by Morningstar, 16 are given five stars and 8 that have four star ratings. The Dow Jones Industrials include 11 out of 30 stocks that are rated five-star stocks and eight four-star stocks. The rest of the stocks in both portfolios are rated three stars, which means they are fairly valued by Morningstar. Five- and four-star stocks are under valued.

Buffett’s BRK.A’s 36 rated stocks have an average of 3.98 stars while the Dow Jones Industrials have an average of 3.85 stars.

Nine of 16 Buffett (BRK.A) portfolio five-star stocks have bullish price objectives: American Express (AXP), Carmax (KMX), ConcoPhilips (COP), Johnson & Johnson (JNJ), Lowes (LOW),  Moody’s (MCO),  Suntrust Banks (STI), Wellpoint (WLP), and Wells Fargo (WFC). Point and figure charts are here. Click on a chart to see hourly, daily and weekly charts. Daily charts are here.

A quick look at the daily MACD charts makes these stocks look a lot more bearish than the point and figure charts do. So, near term, these stocks are correcting, and if they correct much more, a lot of these point and figure charts could turn bearish, too.

Full disclosure: I don’t own any of these stocks.

For educational purposes only. Investigate stocks on Reuters.com, Yahoo.com and Google.com. Also, search the web for information.
 

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