Vontobel Holding's (VTX:VONN) investors will be pleased with their notable 32% return over the last year
Passive investing in index funds can generate returns that roughly match the overall market. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Vontobel Holding AG (VTX:VONN) share price is 24% higher than it was a year ago, much better than the market return of around 10% (not including dividends) in the same period. So that should have shareholders smiling. Unfortunately the longer term returns are not so good, with the stock falling 20% in the last three years.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
See our latest analysis for Vontobel Holding
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Vontobel Holding was able to grow EPS by 5.1% in the last twelve months. The share price gain of 24% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
This free interactive report on Vontobel Holding's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Vontobel Holding the TSR over the last 1 year was 32%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!
We're pleased to report that Vontobel Holding shareholders have received a total shareholder return of 32% over one year. Of course, that includes the dividend. That gain is better than the annual TSR over five years, which is 2%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Keeping this in mind, a solid next step might be to take a look at Vontobel Holding's dividend track record. This free interactive graph is a great place to start.
We will like Vontobel Holding better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Swiss exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
1 Reason to Buy Berkshire Hathaway Stock Like There's No Tomorrow
Berkshire has amassed a giant cash hoard. This cash pile has two complementary benefits. 10 stocks we like better than Berkshire Hathaway › For decades, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) has been a reliable way to generate double-digit annual returns. The company's leader, Warren Buffett, is one of the most successful investors of all time. By buying Berkshire stock, you essentially outsource your investment decisions to Buffett -- historically a very wise move. With a market cap of more than $1 trillion, many investors worry that it's too late to buy Berkshire stock. Don't be fooled. Berkshire stock is still an incredible investment for many reasons. But right now, it has a unique advantage that few alternative investments offer. Since the end of 2023, Berkshire has essentially doubled its cash pile. As of last quarter, the business held roughly $350 billion in cash. Buffett has pushed back on the idea that this growing cash pile represents a negative view on markets in general. "Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities," he wrote in his latest letter to investors. "Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities." None of these comments should come as a surprise. Berkshire was designed as an investment holding company, and holding equities over the long term is almost always preferred over holding cash. But the signal is clear: Buffett and Berkshire are having difficulties deploying its cash pile into attractive investment opportunities. If there were avenues for investment available, Buffett would undoubtedly deploy the cash. There are only two reasonable expectations for Berkshire's growing cash pile, which now comprises roughly one-third of the company's entire market cap. The first possibility is that Berkshire has grown so large that it can't find large enough investments to move the needle. Buffett has noted in the past that if he managed only $1 million, he could generate 50% annual returns. But for a company as large as Berkshire, only massive companies can generate meaningful results. This limits Berkshire's potential investable universe. While this is a real phenomenon, Buffett could always deploy most or even all of this cash into a highly liquid index fund that tracks the overall market. The fact that he is not doing this means that he'd rather not tie these funds to the market as a whole -- an overall bearish sign for broad market indexes. The second possibility is that Buffett can't find attractive investment opportunities in general. This is more likely than Berkshire being unable to find meaningful investment opportunities, because as mentioned, he could always buy a market index fund with high liquidity. If Buffett can't find good deals, it's a good sign that there simply aren't many bargains out there to be had. What do you want to have during a market decline? Extra cash, and boy, does Berkshire have plenty of that. By buying Berkshire stock today, your upside potential may be limited due to this cash balance. But in a declining market, this is exactly where you want to be. In fact, high cash levels have another advantage that could set you up for the next long-term bull cycle. Extra cash can insulate a portfolio during market declines. This cash also gives you the chance to invest in bargain equities at times when few other investors have extra cash to deploy. This is perhaps the best reason to load up on Berkshire stock today: The company's huge cash pile can set it up for both a bear market and the next bull market. Buffett is famous for his long-term investment philosophy, and over the decades, he has put his money where his mouth is. Many of his biggest holdings have been in Berkshire's portfolio for decades. If equities decline in value across the board, expect Buffett to put all this cash into use, acquiring more shares of his favorite holdings. Is Berkshire's upside potential hampered a bit by high cash balances? Yes, but this cash also gives it plenty of flexibility. If you're nervous about high asset valuations but want to make sure your money stays optimally invested, Berkshire remains one of your best options to bet big on. Before you buy stock in Berkshire Hathaway, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Berkshire Hathaway 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 $653,702!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $870,207!* Now, it's worth noting Stock Advisor's total average return is 988% — a market-crushing outperformance compared to 172% 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 9, 2025 Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy. 1 Reason to Buy Berkshire Hathaway Stock Like There's No Tomorrow was originally published by The Motley Fool
Yahoo
2 hours ago
- Yahoo
Billionaire Warren Buffett Has a $348 Billion Dilemma -- and His Decision Is Only Getting Tougher
Warren Buffett has been a net seller of stocks for two and a half years. Though Berkshire Hathaway's cash pile has ballooned to $348 billion, the historical priciness of equities is keeping Buffett firmly on the sidelines. While Buffett's patience may be unsettling to investors, his willingness to wait for price dislocations is what's made Berkshire's chief such a phenomenal asset manager. 10 stocks we like better than Berkshire Hathaway › There isn't a money manager on Wall Street who garners more attention from professional and everyday investors than Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) billionaire CEO Warren Buffett. When you deliver an aggregate return for your company's Class A shares (BRK.A) of better than 5,910,000% over six decades (as of the closing bell on June 11), you're going to draw a crowd. But the aptly dubbed "Oracle of Omaha" is also 94 years old and readying to hang up his proverbial work coat. During Berkshire's annual shareholder meeting in early May, Buffett announced his plan to step down as the company's CEO by the end of the year and hand over the reins to predetermined successor Greg Abel. Though Warren Buffett's time at the helm is limited, it doesn't change the fact that he's facing a $348 billion dilemma, which is seemingly getting tougher by the day. Most investors follow Buffett to get a bead on which stocks he's been buying and selling -- with far more interest in the former than the latter. Riding his coattails has been a profitable investing strategy for decades. While Buffett has, indeed, been purchasing shares of select companies on a quarterly basis, the theme of the last two and a half years is that of Berkshire's chief being a net seller of equities. Berkshire Hathaway's quarterly operating results contain a detailed consolidated cash flow statement that specifically lists "purchases of equity securities" and "sales of equity securities." Some simple arithmetic can allow anyone to decipher whether or not the Oracle of Omaha and his top investment advisors were net buyers or sellers of stocks in the latest quarter. During the March-ended quarter, Warren Buffett sold $1.494 billion more in stocks than was purchased. This marked the 10th consecutive quarter -- a stretch spanning from Oct. 1, 2022 to March 31, 2025 -- where Buffett was a net seller of stocks. On a cumulative basis, Berkshire's head honcho has disposed of $174.4 billion more in stocks than was purchased over this 30-month timeline. All the while, the roughly five dozen businesses Berkshire owns have remained sustainably profitable and continue to generate positive cash from operations. Put this net cash generation together with Buffett's persistent net-selling activity and you get Berkshire Hathaway's cash pile (which includes U.S. Treasuries) ballooning to $347.7 billion. For most companies, an exorbitant cash pile would be a luxury. But for Berkshire Hathaway's lead investor, it's indicative of a dilemma that shows no signs of resolution anytime soon. In an ideal world, the Oracle of Omaha would prefer to put most of his company's capital to work via large investments or acquisitions that would move the needle. Keep in mind that at least $30 billion in combined cash, cash equivalents, and U.S. Treasuries needs to remain on Berkshire's balance sheet to conduct share buybacks, so Buffett won't be dipping below (or generally close to) this level. However, Berkshire's top investor is also unwavering in his desire to get a good deal. Regardless of a company's competitive advantages or rich history, Warren Buffett won't chase pricey stocks higher. He'll patiently sit on his hands and wait for price dislocations to crop up before diving in. Despite Berkshire's cash pile growing to a record $348 billion, Buffett has little-to-no incentive to put this capital to work amid the historic priciness of the stock market. Nearly a quarter of a century ago, in an interview with Fortune magazine, Buffett referred to the market cap-to-GDP ratio as "probably the best single measure of where valuations stand at any given moment." This valuation tool, which aggregates the value of all publicly traded stocks and divides it by U.S. gross domestic product (GDP), has come to be known as the "Buffett Indicator." When back-tested to 1970, the Buffett Indicator has averaged a reading of approximately 85%, which means the total value of all publicly traded stocks has equated to 85% of U.S. GDP. However, as of the closing bell on June 10, the Buffett Indicator was a few hundredths shy of 202%! It's also within a stone's throw of its all-time high of 205.55%, which was set in mid-February. Another broad-stroke valuation tool that demonstrates what little value can be found on Wall Street at the moment is the S&P 500's (SNPINDEX: ^GSPC) Shiller price-to-earnings (P/E) Ratio, which may also be referred to as the cyclically adjusted P/E Ratio (CAPE Ratio). The Shiller P/E is based on average inflation-adjusted earnings over the prior 10 years. When back-tested to January 1871, the average Shiller P/E multiple is a touch over 17. As of the closing bell on June 11, the Shiller P/E sported a multiple of more than 37. Although this is down from a peak reading of 38.89 during the current bull market cycle, it marks the third-priciest multiple spanning 154 years. While the Shiller P/E offers no guidance on when stock market corrections will commence, it does have a flawless track record of foreshadowing eventual downside of 20% or more in Wall Street's major stock indexes, including the S&P 500, when surpassing a multiple of 30. Historically, putting Berkshire Hathaway's capital to work has helped the company grow its sales and/or profits. But until valuation multiples stop going up, it's unlikely that Warren Buffett will be doing much of anything on the investment front, which suggests Berkshire's cash pile is going to continue to expand. However, this isn't necessarily a bad thing -- even if investors are growing weary of the Oracle of Omaha's net-selling activity. To use a baseball analogy, Buffett's outsized investment returns aren't a function of swinging at a lot of pitches. Even though Berkshire Hathaway has more than enough capital that Buffett could, in theory, swing for the fences on a daily basis, his success has been based on waiting for the right pitch to enter his wheelhouse. Regardless of how long it takes, Buffett and his successor Greg Abel have demonstrated a willingness to remain on the sidelines until valuations make sense. For example, Buffett has been purchasing shares of satellite-radio operator Sirius XM Holdings (NASDAQ: SIRI), whose forward P/E ratio of a little over 7 is just shy of its all-time low as a publicly traded company of 31 years. Though Buffett's investment in Sirius XM isn't needle-moving, it's representative of the principles to which Buffett has aligned his investment philosophy. Sirius XM's legal monopoly status ensures its moat, and the company's ultra-low forward P/E presents as a price dislocation amid a historically expensive market. As I've pointed out before, patience paid off handsomely in August 2011 for Berkshire Hathaway and its shareholders when Buffett orchestrated a deal to infuse Bank of America (NYSE: BAC) with $5 billion to shore up its balance sheet. In return, Buffett's company netted $5 billion in BofA preferred stock yielding 6% annually, as well as warrants to purchase up to 700 million shares of Bank of America common stock at $7.14 per share. These warrants were executed in the summer of 2017, leading to an instant (unrealized) profit of $12 billion for Berkshire. Eventually, the lion's share of Berkshire Hathaway's $348 billion in cash will be put to work -- but this won't happen until price dislocations or unique, needle-moving situations present themselves. Before you buy stock in Berkshire Hathaway, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Berkshire Hathaway 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 $653,702!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $870,207!* Now, it's worth noting Stock Advisor's total average return is 988% — a market-crushing outperformance compared to 172% 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 9, 2025 Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Bank of America and Sirius XM. The Motley Fool has positions in and recommends Bank of America and Berkshire Hathaway. The Motley Fool has a disclosure policy. Billionaire Warren Buffett Has a $348 Billion Dilemma -- and His Decision Is Only Getting Tougher was originally published by The Motley Fool
Yahoo
2 hours ago
- Yahoo
2 No-Brainer Warren Buffett Stocks to Buy With $1,000 Right Now
Amazon's core e-commerce business is resilient, and the company's AI investments are paying off. Berkshire Hathaway oversees a diverse set of cash-rich businesses that are resistant to economic slowdowns. The company is also sitting on the largest war chest in its history. 10 stocks we like better than Amazon › While uncertainty is always the name of the game in investing, the last few months have been particularly chaotic. Global trade tension spurred by President Donald Trump's sweeping tariffs, especially their on-again, off-again nature, has caused investor anxiety to spike. At a time like this, it's worth it to look at the portfolio of the legendary Warren Buffett to consider what might be some smart, no-brainer investments. Here are my two favorites from the "Oracle of Omaha." Although an apparent resolution to the ongoing trade negotiations has been reached, given how much Amazon's (NASDAQ: AMZN) supply chain is tied up with China, investors are right to be wary of the effect Trump's trade policies will have on the company's bottom line. That being said, I think the threat is overblown for investors looking to hold for the long term -- which is exactly the kind of investing at the core of Buffett's philosophy. A reescalation of the trade war with China would undoubtedly affect Amazon, but any disruptions would ultimately be temporary. The fact that Amazon's core e-commerce business is so deeply embedded in people's daily lives doesn't change with a temporary slowdown. Luckily for investors, Amazon Web Services (AWS), the cloud service provider and subsidiary of Amazon, is much less exposed to tariffs and changes in consumer spending. It's also the fastest-growing part of Amazon's empire, up 17% year over year in first-quarter 2025, as AI models demand more and more compute power. In the company's recent earnings call, Amazon CEO Andy Jassy cited just how big an opportunity AWS is addressing: "Before this generation of AI, we thought AWS had the chance to ultimately be a multi-hundred-billion-dollar revenue run rate business. We now think it could be even larger." Amazon is in a strong position to succeed in the highest growth area of the economy, AI, while continuing to enjoy a significant moat around its massive core e-commerce business. Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), Warren Buffett's own company, has proven itself a winner time and again for the last 60 years. Its investments in outside companies are the stuff of legend, and its diverse set of internal businesses spanning several recession-resistant industries provides it with a steady flow of cash. Now, quite famously, the company is sitting on its largest war chest ever, a sum of cash that would make most countries jealous. This makes Berkshire a wonderful hedge against any sort of major economic downturn or crisis. The company can use those funds to make strategic investments at a time when most investors are scrambling to protect their capital. Just as in the aftermath of 2008, a financial crisis offers those with major war chests like Berkshire the opportunity to find incredible deals. Take, for example, Buffett's investment in Bank of America following the Great Financial Crisis. In six years, Buffett turned a $5 billion investment into an on-paper profit of $12 billion (Berkshire held on to its shares). Even if a major crisis doesn't present itself any time soon, Berkshire's insurance business is strong. It's not without obstacles. Last year's multiple hurricanes and this year's Los Angeles fires had a major effect on Berkshire's bottom line, but as time goes on, premiums will adjust to make up for any increased rates of damage. And yes, the elephant in the room is that Buffett is stepping down as CEO of Berkshire, but I think fears surrounding his departure are overblown. The company he built is infused to the core with his ethos, and his successor, Greg Abel, is a competent replacement whom Buffett has been mentoring for many years. Political and economic uncertainty will always be part of investing, so it's critical not to jump ship when things get particularly rocky. It's why investing in companies you really believe in and want to hold for the long term is the best strategy. It makes it so much easier to take the long view and remain level-headed when the economy dips. For my money, both Amazon and Berkshire are excellent additions to any portfolio. Amazon continues to deliver growth and innovation, while Berkshire Hathaway stands as a pillar of stability and opportunity in times of crisis. Before you buy stock in Amazon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Amazon 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 $653,702!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $870,207!* Now, it's worth noting Stock Advisor's total average return is 988% — a market-crushing outperformance compared to 172% 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 9, 2025 Bank of America is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Bank of America, and Berkshire Hathaway. The Motley Fool has a disclosure policy. 2 No-Brainer Warren Buffett Stocks to Buy With $1,000 Right Now was originally published by The Motley Fool Sign in to access your portfolio
