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Aug. 10, 2015, 7:48 a.m. EDT

Precision Castparts a 'perfect fit' for Warren Buffett's Berkshire Hathaway, analyst says

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By Tomi Kilgore

Precision Castparts Corp. is a "perfect fit" for Warren Buffett's Berkshire Hathaway Inc. /zigman2/quotes/200060694/composite BRK.B +0.28% , says Sterne Agee CRT analyst Peter Arment, because "it's in a growth industry (both organic and inorganic), has significant market shares in all platforms, high barriers to entry and is very profitable with industry leading operating margins." Arment doesn't foresee any antitrust issues, or any likely other suitors that can top Buffett's bid for the company. He said the selloff in Precision Castparts' stock over the last 18 months is a result of missteps in its oil and gas business, and because the company has missed earnings expectations in 13 out of 18 quarters. "Being private with Warren Buffett takes the latter issue off the table," Arment wrote in a note to clients. Precision Castparts' stock (PCP) has dropped 25% over the past 18 months through Friday, while the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.01% has climbed 16%. PCP soared 20% in premarket trade, while Berkshire Hathaway's stock slipped 1.7%.

/zigman2/quotes/200060694/composite
US : U.S.: NYSE
$ 278.49
+0.79 +0.28%
Volume: 3.22M
July 23, 2021 4:02p
P/E Ratio
6.33
Dividend Yield
N/A
Market Cap
$636.75 billion
Rev. per Employee
$681,972
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/zigman2/quotes/210599714/realtime
US : S&P US
4,411.79
+44.31 +1.01%
Volume: 1.78B
July 23, 2021 5:16p
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