Alpha Algorithm Bets on Buffett
09/19/2016 7:00 am EST
Our latest featured recommendation also happens to be the investment vehicle of famed investor Warren Buffett, explains Nicholas Vardy, editor of the data-driven advisory service, Alpha Algorithm Alert.
Berkshire Hathaway (BRK.B), based in Omaha, Nebraska, is a holding company that owns subsidiaries engaged in the insurance and freight rail transportation business, as well as a group of utility and energy generation and distribution businesses.
After being stuck in a trading range for the past two years, the stock recently broke out to a new 52-week high. Below are eight top investment strategies that are betting on Berkshire Hathaway:
High Quality Stock
The stock exhibits positive fundamentals, including high return on equity, stable year-over-year earnings growth and low financial leverage.
Selected using a multi-factor modeling approach, the stock is a value stock designed to enhance portfolio risk/return characteristics.
A top U.S. stock based on fundamentals measured by book value, cash flow, sales and dividends.
Hedge Fund Alpha
Based on publicly available disclosures, successful hedge fund managers are investing in the stock.
Hedge Fund Gurus
The stock is one of the top U.S.-listed equity positions reported on Form 13F by select hedge funds with concentrated top holdings.
This stock is included in a strategy that tracks an equal-weighted index of 20 companies that Morningstar determines to have the highest fair value among firms with a sustainable competitive advantage or “moat.”
Goldman Sachs’ Active Beta
Stocks are selected according to four factors -- value, quality, momentum and low volatility. They are based on criteria including book value, sales and cash flow scaled by share price, profit/assets or return on equity (ROE), risk-adjusted returns and daily standard deviation of returns.
A large-cap U.S. stock selected for its low volatility and positive price performance in a rising interest rate environment.
Our recommendation is to buy Berkshire Hathaway at market. Place your initial stop at $142 per share.
By Nicholas Vardy, Editor of Alpha Algorithm Alert