Brookfield Explores Using Insurance Arm to Adopt Berkshire Model
Brookfield Asset Management Chief Executive Officer Bruce Flatt said its growing insurance business may ultimately own the rest of its operations in a move that emulates Berkshire Hathaway Inc.
'It would be just turned up this way, with the insurance business owning our asset management and our investment operations,' Flatt said Wednesday at the Bloomberg Invest conference in New York, adding that it's 'really what Berkshire Hathaway is.'
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3 Reasons Warren Buffett Wouldn't Touch Palantir Stock With a 10-Foot Pole
Buffett only invests in businesses he understands -- and he doesn't understand AI. Palantir's dependence on U.S. government contracts makes it difficult for Buffett to predict its earnings growth. Buffett would likely find Palantir's valuation shocking. 10 stocks we like better than Palantir Technologies › What's the hottest mega-cap stock on the market right now? Palantir Technologies (NASDAQ: PLTR). Shares of the artificial intelligence (AI)-powered software provider have skyrocketed more than 70% year to date. No other stock with a market cap of at least $200 billion has delivered anywhere close to that gain. While many investors have hopped aboard the Palantir bandwagon, Warren Buffett isn't one of them. Don't expect the multi-billionaire to become a fan of the stock anytime soon, either. Here are three reasons why Buffett wouldn't touch Palantir stock with a 10-foot pole. I seriously doubt that Buffett has even looked at Palantir's financials. Why? The company's business isn't in Buffett's wheelhouse. The legendary investor was asked at Berkshire Hathaway's annual shareholder meeting last month if he anticipated being able to put the conglomerate's hefty cash stockpile to use soon. Buffett replied that he'd be willing to invest $100 billion in a company if it met several criteria. First on the list was that he understands the business. Granted, Berkshire's portfolio has included software companies in the past. Snowflake is a great example. However, CNBC noted shortly after Berkshire invested $800 million in the AI cloud software provider, "It's widely speculated that Buffett lieutenants Todd Combs and Ted Weschler orchestrated the Snowflake bet." I think it's a safe bet that this take is correct. Buffett has readily acknowledged that he doesn't understand AI. I suspect Palantir's AI-focused business is enough reason by itself for the legendary investor to avoid buying any shares. Let's suppose, though, that Buffett didn't shy away from investing in Palantir because of its business. I still don't think he would buy the stock for another critical reason: He couldn't reasonably estimate the company's long-term earnings growth. Buffett wrote to Berkshire Hathaway shareholders in 2014 that his first step in evaluating a stock (or business) he's considering buying is to try to estimate its future earnings for at least the next five years. He stated, "If, however, we lack the ability to estimate future earnings -- which is usually the case -- we simply move on to other prospects." I seriously doubt that Buffett would be able to project Palantir's earnings growth because so much of the company's business stems from U.S. government contracts. How much federal money Palantir might receive depends in large part on which way the political winds are blowing over the next few years. Buffett's nickname is the "Oracle of Omaha," but even he probably wouldn't try to predict what will happen in Washington, D.C. Buffett studied under Benjamin Graham, who is widely recognized as "the father of value investing." Although Buffett isn't as much a purist value investor now as he was in the past, he still looks closely at stock valuations before investing. I'd bet that Buffett would find Palantir's valuation shocking. Actually, I think many investors would find it shocking. We're talking about a stock that trades at roughly 103.9 times trailing 12-month sales and more than 238 times forward earnings. The only way those metrics would be justifiable is if Palantir were generating truly spectacular growth. To be sure, the company is growing rapidly -- 39% year over year in the first quarter of 2025. But is this growth rate sustainable? Probably not. Palantir's own revenue guidance for full-year 2025 reflects expected somewhat slower growth of around 36%. 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Warren Buffett Recently "Came Pretty Close" to Spending $10 Billion On an Acquisition, and I Strongly Believe One of These 2 Companies Was the Target
During Berkshire Hathaway's annual shareholder meeting. Warren Buffett noted that he and his team nearly pulled the trigger on a $10 billion deal. One potential buyout target is a legal monopoly that Buffett's company already holds a 35% stake in. Meanwhile, the other possible acquisition target is a time-tested business that has the second longest consecutive annual dividend streak of any U.S. public company. 10 stocks we like better than Sirius XM › There's not a billionaire investor on Wall Street who captivates the attention of professional and everyday investors like Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett. He earned his nickname, the "Oracle of Omaha," by absolutely crushing the broad-based S&P 500 in the return column over the last 60 years. No event is more special than Berkshire Hathaway's annual shareholder meeting, which typically draws in the neighborhood of 40,000 people. 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Completing the purchase of the remaining shares at a premium price still wouldn't cost Berkshire $10 billion out of pocket. Secondly, Sirius XM provides a sustainable competitive advantage, which is something that Warren Buffett tends to seek out in the businesses he invests in. Although it's still competing for listeners with traditional radio providers, it's the only company with a satellite-radio license. Being a legal monopoly should afford Sirius XM a level of subscription pricing power that other companies can't match. The third factor that would have made Sirius XM an ideal $10 billion acquisition target for Buffett is its diversified revenue stream. Whereas terrestrial and online radio providers almost exclusively generate their revenue from advertising, Sirius XM brings in a little north of three-quarters of its net sales from subscriptions. 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Stanley Black & Decker owns a laundry list of brand-name tool and outdoor brands, including DeWalt, Craftsman, Irwin, Cub Cadet, Lenox, and its namesakes Stanley and Black & Decker. These brands are easily identifiable by consumers and have helped to build trust in the company for more than a century. Additionally, Stanley Black & Decker is time-tested. This is a company founded in 1843 that's grown organically and through acquisitions of its own. It's increased its base annual dividend in each of the last 58 years, and offers the second-longest streak among U.S. public companies of paying a dividend for 149 consecutive years. Companies don't pay a dividend annually for nearly 150 years by accident. This is a testament that its operating model works. Despite tariff-related uncertainty clouding the company's near-term outlook, management has taken steps to improve margins over the long run. Its global cost reduction program has resulted in roughly $1.7 billion in pre-tax annual run-rate cost savings since being introduced in mid-2022. Further, its supply chain remains nimble enough that shifting production to Mexico and the U.S. will help it avoid potential tariffs tied to China over the next two years. Most importantly, Stanley Black & Decker offers a historically tempting valuation discount. Accounting for all the headwinds it's currently working through, shares of Stanley Black & Decker are priced at roughly 11 times forecast earnings per share in 2026. For context, this represents a 37% discount to its average forward-year earnings multiple over the trailing-five-year period. If there was a $10 billion acquisition to be made by Warren Buffett's Berkshire Hathaway, either Sirius XM or Stanley Black & Decker perfectly fit the mold. 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Warren Buffett Recently "Came Pretty Close" to Spending $10 Billion On an Acquisition, and I Strongly Believe One of These 2 Companies Was the Target was originally published by The Motley Fool
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Down 21%, Should You Buy the Dip on Apple Stock? The Answer Might Surprise You.
It's the combination of products and services that has made Apple one of the best businesses on Earth. Ongoing uncertainty surrounding the tariff situation adds to investor concerns. At the current valuation, Apple stock provides zero margin of safety. 10 stocks we like better than Apple › Apple (NASDAQ: AAPL) shares are down 18% in 2025 (as of June 6). This makes Apple the worst-performing "Magnificent Seven" constituent this year, besides Tesla. Investors are probably concerned about tariff uncertainty and the company's slow progress with artificial intelligence (AI). The stock is currently 21% below its peak. So, it has some work to do to get back to its former glory. Legendary investor Warren Buffett and his conglomerate, Berkshire Hathaway, have sold a sizable chunk of their shares in the past several quarters. However, should you go against the Oracle of Omaha's moves and buy the dip on Apple stock? I think the answer might surprise you. I mention Buffett because many individual investors like to follow his buy and sell decisions. Clearly, when Berkshire first bought Apple in early 2016, they must've thought the tech giant was a high-quality enterprise. It's not hard to see why. Apple's brand is arguably the most recognizable in the world. This position wasn't created overnight. It took years and years of introducing truly exceptional products and services, that were well designed and incredibly easy to use, on a global scale. Apple is an icon, to say the least. That brand has helped drive Apple's pricing power. And this supports the company's unrivaled financial position. Apple remains an unbelievably profitable business. It brought in $24.8 billion in net income in the latest fiscal quarter (Q2 2025 ended March 29). Apple's products and services are impressive on their own. However, it's the combination of both of these aspects that creates the powerful ecosystem. Consumers are essentially locked in, which creates high barriers for them to switch to competing products. This favorable setup places Apple in an enviable position from a competitive perspective. Despite Apple's market cap of nearly $3.1 trillion, which might make some investors believe it's immune to external challenges, this business is dealing with some notable issues recently. There are three that immediately come to mind. The first problem is that Apple's growth engine seems to be decaying. Net sales were up less than 7% between fiscal 2021 and fiscal 2024. And they're up just over 4% through the first six months of fiscal 2025. According to management, there are likely over 2.4 billion active Apple devices across the globe. That number continues to rise with every passing quarter, but you get an idea of how ubiquitous these products are. Plus, the maturity of the iPhone, now almost two decades into its lifecycle, might lead to limited opportunities to further penetrate markets. Critics can also call out Apple's slow entrance into the AI race. For example, we won't see an AI update to Siri until next year, a launch that was delayed. At the same time, it seems like other companies are moving rapidly to win the AI race. Lastly, Apple has been and could continue to be drastically impacted by the tariff situation. China, which has gotten the most attention from President Donald Trump during the ongoing trade tensions, has been a manufacturing powerhouse for Apple. The business is being forced to shift its supply chain around to minimize the impact. Apple CEO Tim Cook said that the situation makes it challenging to forecast near-term results. Even though this stock trades 21% off its peak, investors aren't really getting a bargain deal here. The price-to-earnings ratio is 32 right now. That's not cheap for a company whose earnings per share are only expected to grow at a compound annual rate of 8.8% between fiscal 2024 and fiscal 2027. In my view, there's zero margin of safety. If you're an investor who wants to generate market-beating returns over the next five years, I don't think you should buy Apple today. Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Tesla. The Motley Fool has a disclosure policy. Down 21%, Should You Buy the Dip on Apple Stock? The Answer Might Surprise You. was originally published by The Motley Fool
