Want to Bet on America? Bet on This Company.

One of the strongest balance sheets imaginable is a key reason Real Money Columnist Stephen ‘Sarge’ Guilfoyle likes this stock.


Ellen Chang

Publish date:

Apr 8, 2022 6:02 AM EDT

No less a sage than Warren Buffett, the “Oracle of Omaha,” frequently argues that investors can simplify their lives by remembering a key rule: Never bet against America.

It’s an appealing admonition for its simplicity, its patriotic undertone and, judging by its author’s continuing success, its accuracy. 

But if the rule is not to bet against America, the question becomes “OK, so how do you bet on America?” 

The answer, according to Real Money Columnist Stephen ‘Sarge’ Guilfoyle, is equally simple: own shares of either Berkshire Hathaway  (BRK.A) – Get Berkshire Hathaway Inc. Class A Report or  (BRK.B) – Get Berkshire Hathaway Inc. Class B Report.

“I have been long BRK.B for months now as not only do I tend to root for the home team, like you, I have noticed that BRK.A and BRK.B did not suffer the same correction/bear market that the rest of the broader marketplace did in early 2022,” Guilfoyle wrote. “Berkshire, led by the brilliant pair of Warren Buffett and Charlie Munger, has been busy of late.”

The conglomerate recently acquired insurer Allegheny  (Y) – Get Alleghany Corporation Report for $11.6 billion in cash, adding to Berkshire’s portfolio of insurance companies – Gen Re and GEICO.

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The dymanic duo have also been busy adding shares of companies such as Occidental Petroleum  (OXY) – Get Occidental Petroleum Corporation Report to its existing position and taking a new stake in HP Inc.   (HPQ) – Get HP Inc. Report.

Berkshire’s cash levels remain high and are very impressive. As of December 31, the company had a net cash position of $146.72 billion.

The company’s balance sheet is also remarkable with a current ratio of 4.05, “which is not just healthy, it’s healthy at a scale and scope hard to imagine,” Guilfoyle wrote.

“Put bluntly, this balance sheet passes the Sarge test with flying colors,” he wrote.

One thing investors should note is that the behemoth’s “B” shares “have broken out of an ascending triangle with a $325 pivot,” Guilfoyle wrote.

“Based on that $325 pivot, I have set a $390 target price for my own position,” he wrote. “Readers should be aware that a basing period of consolidation where the stock moves sideways after its recent run would be constructive and not in my opinion, a negative.”

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