No Sign of Crisis at Berkshire Hathaway and Danaher

Berkshire Hathaway

Berkshire Hathaway (BRK) has returned to growth in the first 9 months, benefiting from the broad recovery in the global economy. Revenue rose 12.8% to $204.3 billion. The bottom line saw profits jump from $6.7 billion to $50.2 billion. However, the results could have been much better. The worldwide supply bottlenecks for a wide range of goods had a negative impact on its manufacturing and retail interests.

The catch-up effects following the pandemic are causing congestion in logistics chains, especially at ports. In addition, the hurricane season was particularly rough on its insurance segment. There were high losses from floods. In the long term, however, these effects have little impact.

Berkshire Hathaway Still Sitting on a Large Amount of Cash

Warren Buffett’s biggest problem remains its large cash holdings, which total $149.2 billion after Q3. The Oracle of Omaha is finding too few lucrative investment opportunities. The issue is not new, but has been with Berkshire for years. 

But anyone familiar with Buffett and his investment philosophy knows that acquisitions in emerging markets tend to be the exception. In addition, Buffett has an aversion to technology companies, which have recently had a significant impact on brand development.

I don’t expect any major investments to be made this year. However, if there is a significant correction in the markets, Buffett will – unlike in the COVID year 2020 – take a more courageous stance in order to continue to grow.

Berkshire Hathaway Profile

Berkshire Hathaway is a diversified holding company with insurance as its core business, both primary insurance (property and casualty such as GEICO) and reinsurance (General Re). Exposures also include manufacturing (Shaw Industries) and energy (MidAmerican Energy). The financial investment portfolio includes holdings in Coca-Cola, Gillette, American Express and others.

Danaher (DHR) Reported Excellent Figures for the First 9 Months, Pulverizing All Expectations

Sales were up 37.2% to $21.3 billion. Bottom line earnings nearly doubled to $6.22 per share. The track record is impressive. Organic growth rates are sensational. In addition, the board also proved to have a lucky hand when it came to strategic acquisitions. 

Most recently, Danaher bought biotechnology company Aldevron for $9.6 billion. The purchase price was paid immediately and in cash, which impressively underlines the financial strength of the conglomerate.

Danaher Acquires Vaccine Manufacturer

Aldevron is a leader in the production of advanced vaccines and has made significant scientific contributions to the advancement of cellular, genetic and other novel therapies in recent years. For example, Aldevron also supplies Moderna with plasmid DNA, which is essential for production for the COVID 19 vaccine. In the future, Aldevron is to be integrated into the healthcare division of the conglomerate and drive forward innovative therapy concepts.

Both groups see an important growth area in genomic medicine, which is still in the very early stages of research and is an important approach to curing cancer. Alphabet and other major tech companies are also investing in this field. Danaher is among the pioneers. Danaher convinces me across the board. The valuation is still too cheap with these successes. I look forward to more records.

Danaher Portrait

Danaher Corp. was founded in 1984 by brothers Mitchell and Steven Rales and is now a globally operating company. The company designs, manufactures and distributes tools, test and measurement equipment. The range of tools includes simple hand tools as well as special tools. The testing and measuring technology supplies material testing machines, instruments for quality control as well as various sensors.

Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.
Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.

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