Berkshire Hathaway (BRK/A and BRK/B), for instance, is not liked because its famous chief executive, Warren Buffett, has just turned 82, likes fudge, hamburgers, and cherry cokes, and has prostate cancer. Folks probably figure he will be dead any day now, and then his company's stock will plummet. Even if we assume the worst, though, and he dies tomorrow, his management style and means of increasing the Berkshire Hathaway's net worth have been built into it. That tradition is not going away when he departs the scene. And people who are avoiding the stock now because of Buffett's age and health have discounted the stock so much it is selling at only 0.68 of its conservatively estimated per share intrinsic value. Further, the company's policy is to buy more of its own shares if the stock price falls below 1.1 times its book value. Sure, the stock may go down later. That will be a terrific opportunity to load up on it at a still greater bargain level.
BlackRock generates tons of cash flow, has recent insider buying, and sports a dividend twice that of a 10-year government bond.
Or consider Chesapeake Energy. It has had some challenges of late. Yet its price to earnings and price to book value (0.9) combined with a debt to equity ratio of less than one make this a Ben Graham type value investment.
Expeditors Int'l. has zero debt, yet a return on equity of over 18%.