Summary
Berkshire Hathaway is undervalued by 17%.
Berkshire owns Burlington Northern Santa Fe, the nation's largest railroad.
BNSF will be a major driver of earnings.
The stock should rise to $251 by 2020.
I think Berkshire Hathaway's Class B stock (BRK.B) is undervalued and has the potential to rise 17% to $251 by 2020.
Berkshire Hathaway has two classes of stock. The original A-shares (BRK.A), which closed at $320,000 a share on Sept. 28 and the more affordable B-shares, which closed at $214 a share. The company's current market capitalization is $528.4 billion. I believe that the shares are trading at a significant discount to its intrinsic value of $619.5 billion.
In order for market cap to catch up to one times book value, the stock would need to be $251, or 17% higher, than the $214 share price on September 28.
