Barron’s makes the bull case for Graham Holdings (GHC) - Get Graham Holdings Co. Report, calling it a “small-scale version” of Warren Buffett’s Berkshire Hathaway (BRK.B) - Get Berkshire Hathaway Inc. Class B Report. (BRK.A) - Get Berkshire Hathaway Inc. Class A Report
Like Berkshire, Graham Holdings offers “a large group of unrelated businesses and a strong balance sheet,” writes Andrew Bary of Barron's.
Graham was named Washington Post Co. until Donald Graham, now chairman of Graham Holdings, sold the newspaper to Amazon (AMZN) - Get Amazon.com, Inc. Report Founder Jeff Bezos for $250 million in 2013.
The Arlington, Va., company’s holdings include the Kaplan education company, manufacturing and health-care units, local TV stations that Barron’s calls “valuable,” auto dealerships, and restaurants in the Washington area.
Analyst Craig Huber of Huber Research Partners has an overweight rating and $730 price target on Graham Holdings stock.
“What Graham is trying to do is recreate a small Berkshire Hathaway and leave the management teams in place to run the businesses,” he told Barron’s. “Investors get frustrated because they don’t understand how it all fits together.”
Most recently, on Wednesday Graham Holdings said it acquired a Ford (F) - Get Ford Motor Company Report dealership in Manassas, Va. Terms weren’t disclosed. Graham also owns three other automotive dealerships: for Lexus (TM) - Get Toyota Motor Corp. Report in Rockville, Md., Honda (HMC) - Get Honda Motor Co. Ltd. Report in Tysons Corner, Va., and Jeep (STLA) - Get Stellantis N.V. Report in Bethesda, Md.
As for Berkshire Hathaway, its B shares recently traded at $300.49, up 0.5%, and have gained 30% over the past 12 months. Morningstar analyst Greggory Warren puts fair value at $320 and assigns Berkshire a wide moat.
He left the estimate unchanged in November, after Berkshire reported third-quarter earnings that were in line with his expectations.
Graham Holdings recently traded at $657.39, up 4.4%. It has gained 13% in the past month.