Whitney Tilson and John Heins recently looked at Todd Combs’ portfolio at Castle Point, prior to being scooped up by Berkshire Hathaway:
However, we did take a gander at the latest Form 13F that Castle Point filed with the Securities and Exchange Commission, detailing the firm’s holdings as of September 30. Most of the stocks he held were financials, the five largest of which were U.S. Bancorp (USB), a large Berkshire holding as well; MasterCard (MA); RenaissanceRe (RNR); Chubb (CB); and Western Union (WU). Only two of his holdings — JPMorgan Chase (JPM) and CIT Group (CIT) — overlap with our present portfolio.
One noticeable disagreement between us and Combs: his failure to own Berkshire Hathaway (BRK.B) itself. Over the past two years, Berkshire, under Buffett’s direction, has aggressively deployed some of its long-hoarded cash into terrific businesses, such as Burlington Northern Santa Fe, at excellent prices. Thanks to strong stock-market performance, we estimate that the value of Berkshire’s investment portfolio jumped to $59 per B share by the end of 2010. Further, we believe Berkshire’s operating businesses are worth another $48 per share (a figure we derive by applying a multiple of ten to estimated 2010 pretax profits of $4.80 per share). The resulting $107 in estimated value per share is 34% above Berkshire’s January 7 close of $80. Known as a quick study, Combs likely has a clearer view of Berkshire’s value today.
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