If you’re a fan of Berkshire Hathaway and the Oracle of Omaha’s investment style, you might want to invest in this fund. Graham Holdings “amounts to a small-scale version of Buffett’s Berkshire Hathaway, with a large group of unrelated businesses and a strong balance sheet,” according to Barron’s.
By Yaёl Bizouati-Kennedy
See: 10 Best Companies To Invest In for 2022Find Out: How Much Is Berkshire Hathaway Worth?
While the name might not sound familiar, it was previously The Washington Post Company before changing its name to Graham Holdings Company as a result of the sale of The Washington Post newspaper to Jeff Bezos on November 18, 2013.
“You don’t get more low-profile than Graham Holdings,” said Craig Huber of Huber Research Partners, one of the few analysts following the stock, citing the company’s lack of quarterly conference calls and limited investor-relations efforts, Barron’s reported.
But that might be a missed opportunity, because the thinly traded stock, at around $590, looks cheap relative to the estimated value of the company’s assets, Barron’s added.
The company’s assets include the Kaplan education business, manufacturing and healthcare groups, three car dealerships, online magazine Slate, as well as the Foreign Policy Group, CyberVista, a cybersecurity training and workforce development company, and several local TV stations, according to its website.
It also includes a restaurant group, including the historic Old Ebbitt Grill, which was the highest-grossing eatery in the capital before the pandemic, according to Barron’s.
“What Graham is trying to do is recreate a small Berkshire Hathaway and leave the management teams in place to run the businesses,” Huber told Barron’s. “Investors get frustrated because they don’t understand how it all fits together.” The analyst has an Overweight rating and a $730 price target on the stock, Barron’s added.
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The company trades well below its book value of about $800 a share, which are up about 10% this year, but are unchanged since the spring of 2017, Barron’s noted. In addition, the company’s earnings are expected to rise 33% in 2022, to $48.25 a share, helped by increased political advertising at the TV stations and lower losses at some of Kaplan’s international businesses.
The fund, with $1.3 billion in assets, has outperformed the Oracle of Omaha’s fund over the past 20 years. Over the past 25, 30, 40 and even nearly 50 years, it has beaten the S&P 500, according to The Wall Street Journal.
Explore: 20 Companies You Didn’t Know Warren Buffett’s Berkshire Hathaway OwnsLearn: 11 Ways Warren Buffett Lives Frugally
The fund’s CEO, 89-year-old Wilmot H. Kidd III, shares some of Buffett’s steadfast mottos of holding steady and being patient as being key to investing.
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