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Five 'UNHEARD' of businesses that beat Warren
Buffett's Berkshire Hathaway
JANUARY -
MARCH 2015
The famous chart below shows Berkshire Hathaway beating the S&P
500 index. The difference in total return since 1967 is a $1,000 invested
in S&P 500 gives an absolute return of $20,600 vs. Berkshire
Hathaway's absolute return of $10m.
DID YOU KNOW?
Berkshire Hathaway beats
Apple in total stock returns!
And Apple is the biggest company by
market capitalization with current
market value $650bn.
Below is the comparative returns of Apple vs. Berkshire, since the start of
Apple's IPOs.
HOWEVER...
There are companies that have
beaten Warren Buffett at his
own game.
ONE
This company is the most diversified health care company in
the U.S. providing health care coverage and benefits services.
Known facts
They served over 70m people in the U.S. and generated revenue of over
$100bn.
On the financial side, the company made several acquisitions
including $12.8bn for Catamaran Corp.
The company has gone through 5 stock split in its stock market
history (all 2 for 1 split).
UnitedHealth would have earned you 'EIGHT' times the
return than Berkshire from 1990 to present.
TWO
ABOUT
Established in 1984, Cisco System is a multinational tech company
selling networking equipment.
Ten years later its sales exceeded $1bn. The company has an
acquisition-driven business model with 192 acquisitions since
1993 to the present date.
FUN FACTS
During the dot-com bubble, Cisco used to be the most valuable
company with a market capitalization reaching $500bn in
March 2000.
Cisco vs. Berkshire total returns
Chart explanations
When Cisco System became the most valuable company in 2000, a
$10,000 investment back in 1990 would earn you $6m bucks within ten
years.
Since 2000, Cisco has not regained even half their stock losses.
However, it stills beat Berkshire by a whopping 10.5 times, despite not
making a new high for fifteen years!
In defense of Berkshire Hathaway, no company can grow forever, and the
company is at its mature growth stage.
The best way to evaluate is to work out Berkshire Hathaway's compound
returns since its inception to the market. (More from this later)
BEFORE GOING TO THE NEXT COMPANY, HERE A
BREAKDOWN OF CISCO BREAKDOWN BY PRODUCT
CATEGORY:
THREE
Not from the UK?
Don't worry, this UK-based bakery is the largest AND beats McDonalds,
regarding the number of outlets (in the UK, of course).
The company was found back in Tyneside (near Newcastle) back in 1939
by John Greggs.
However, it took them twelve years to open their first store.
Now, Greggs had more than 1,671 outlets and employed 20,000 staff in the
UK.
Fun fact
Greggs sell 130m sausage rolls a year.
Greggs has seen tremendous growth over the years and would earn you a
total return that is 49 times greater than Berkshire!
How does Greggs achieve much great
result?
Well, they consistently grew the business at a steady pace, along with
increasing the sales output per store over a long period.
The company manages to improve its sales per store output by
142% since 1991, in nominal terms. Given that UK inflation increase
by 103%, then real sales per store output are 39%.
FOUR
Danaher Corp has five business segments:
- Environmental - Industrial technology
- Life sciences & Diagnostics - Dental
- Test & measurement
Danaher Corp total stock return performance has outpaced
Berkshire by 3.45 times!
The secret to Danaher Corp. success
The acquisition of over 400 businesses since 1984.
Did you know?
It had changed its name three times from DMG, Inc. to
Diversified Mortgage Investors, Inc. by 1978 and from the
name the company was in the real estate sector.
By 1984, it settled for Danaher Corp. to the present day.
The success of its acquisition-driven business model has
attributed to commanding a good market share in each of its
business segments
FIVE
Another UK business that sells clothes in stores and online.
The company was bought by J Hepworth & Son back in
1981 and in 1986 the parent company changed its name to
Next PLC.
NextPlchasunderperformedBerkshireformostofitstimeinthemarketuntilrecently!
However, we should be fair to Berkshire
They have been listed in the market longer than these outperformers
Berkshire is no longer a growth company but a mature business given its size
For a fairer comparison, we should measure stock performance based on
the average compound return since listing in the stock market
The table below shows the compound return since inception to the
stock market. On that basis, Greggs has compiled the highest
compound annual return over the last 27 years!
Buffett's Berkshire over the last 50 years has managed an average
compound annual return of 21%.
To be fair to the Oracle of Omaha, if the above companies still manage to achieve a
21% compound annual return over a 5o year period, then they have achieved the
results of Berkshire!
However, this does not void the fact that by jumping out of Berkshire shares and
buying the above companies would earn you a 'superior' return than Warren
Buffett!!
Thanks for reading!
Are you interested in following the footsteps of the 'Oracle'?
INTERESTED IN ANOTHER FIVE COMPANIES BEATING
BUFFETT'S BERKSHIRE?
Then click here to read my piece on Seeking Alpha!
REFERENCES
1. Allfinancialmatters.com
2. Successstory.com
3. Splithistory.com
4. 10 facts about.com
5. Crunchbase.com
6. BBC.co.uk
7. Huffingtonpost.co.uk
8. Corporate.greggs.co.uk
9. The Sun.co.uk

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Five 'unheard' of businesses that beat warren buffett's berkshire hathaway

  • 1. Five 'UNHEARD' of businesses that beat Warren Buffett's Berkshire Hathaway
  • 2. JANUARY - MARCH 2015 The famous chart below shows Berkshire Hathaway beating the S&P 500 index. The difference in total return since 1967 is a $1,000 invested in S&P 500 gives an absolute return of $20,600 vs. Berkshire Hathaway's absolute return of $10m.
  • 3. DID YOU KNOW? Berkshire Hathaway beats Apple in total stock returns! And Apple is the biggest company by market capitalization with current market value $650bn.
  • 4. Below is the comparative returns of Apple vs. Berkshire, since the start of Apple's IPOs.
  • 5. HOWEVER... There are companies that have beaten Warren Buffett at his own game.
  • 6. ONE
  • 7. This company is the most diversified health care company in the U.S. providing health care coverage and benefits services. Known facts They served over 70m people in the U.S. and generated revenue of over $100bn. On the financial side, the company made several acquisitions including $12.8bn for Catamaran Corp. The company has gone through 5 stock split in its stock market history (all 2 for 1 split).
  • 8. UnitedHealth would have earned you 'EIGHT' times the return than Berkshire from 1990 to present.
  • 9. TWO
  • 10. ABOUT Established in 1984, Cisco System is a multinational tech company selling networking equipment. Ten years later its sales exceeded $1bn. The company has an acquisition-driven business model with 192 acquisitions since 1993 to the present date. FUN FACTS During the dot-com bubble, Cisco used to be the most valuable company with a market capitalization reaching $500bn in March 2000.
  • 11. Cisco vs. Berkshire total returns
  • 12. Chart explanations When Cisco System became the most valuable company in 2000, a $10,000 investment back in 1990 would earn you $6m bucks within ten years. Since 2000, Cisco has not regained even half their stock losses. However, it stills beat Berkshire by a whopping 10.5 times, despite not making a new high for fifteen years! In defense of Berkshire Hathaway, no company can grow forever, and the company is at its mature growth stage. The best way to evaluate is to work out Berkshire Hathaway's compound returns since its inception to the market. (More from this later)
  • 13. BEFORE GOING TO THE NEXT COMPANY, HERE A BREAKDOWN OF CISCO BREAKDOWN BY PRODUCT CATEGORY:
  • 14. THREE
  • 15. Not from the UK? Don't worry, this UK-based bakery is the largest AND beats McDonalds, regarding the number of outlets (in the UK, of course). The company was found back in Tyneside (near Newcastle) back in 1939 by John Greggs. However, it took them twelve years to open their first store. Now, Greggs had more than 1,671 outlets and employed 20,000 staff in the UK. Fun fact Greggs sell 130m sausage rolls a year.
  • 16. Greggs has seen tremendous growth over the years and would earn you a total return that is 49 times greater than Berkshire!
  • 17. How does Greggs achieve much great result? Well, they consistently grew the business at a steady pace, along with increasing the sales output per store over a long period.
  • 18. The company manages to improve its sales per store output by 142% since 1991, in nominal terms. Given that UK inflation increase by 103%, then real sales per store output are 39%.
  • 19. FOUR
  • 20. Danaher Corp has five business segments: - Environmental - Industrial technology - Life sciences & Diagnostics - Dental - Test & measurement
  • 21. Danaher Corp total stock return performance has outpaced Berkshire by 3.45 times!
  • 22. The secret to Danaher Corp. success The acquisition of over 400 businesses since 1984. Did you know? It had changed its name three times from DMG, Inc. to Diversified Mortgage Investors, Inc. by 1978 and from the name the company was in the real estate sector. By 1984, it settled for Danaher Corp. to the present day.
  • 23. The success of its acquisition-driven business model has attributed to commanding a good market share in each of its business segments
  • 24. FIVE
  • 25. Another UK business that sells clothes in stores and online. The company was bought by J Hepworth & Son back in 1981 and in 1986 the parent company changed its name to Next PLC.
  • 27. However, we should be fair to Berkshire They have been listed in the market longer than these outperformers Berkshire is no longer a growth company but a mature business given its size For a fairer comparison, we should measure stock performance based on the average compound return since listing in the stock market
  • 28. The table below shows the compound return since inception to the stock market. On that basis, Greggs has compiled the highest compound annual return over the last 27 years! Buffett's Berkshire over the last 50 years has managed an average compound annual return of 21%. To be fair to the Oracle of Omaha, if the above companies still manage to achieve a 21% compound annual return over a 5o year period, then they have achieved the results of Berkshire! However, this does not void the fact that by jumping out of Berkshire shares and buying the above companies would earn you a 'superior' return than Warren Buffett!!
  • 29. Thanks for reading! Are you interested in following the footsteps of the 'Oracle'? INTERESTED IN ANOTHER FIVE COMPANIES BEATING BUFFETT'S BERKSHIRE? Then click here to read my piece on Seeking Alpha!
  • 30. REFERENCES 1. Allfinancialmatters.com 2. Successstory.com 3. Splithistory.com 4. 10 facts about.com 5. Crunchbase.com 6. BBC.co.uk 7. Huffingtonpost.co.uk 8. Corporate.greggs.co.uk 9. The Sun.co.uk