Berkshire Hathaway Gets Brokerage Boost

Thank you, PaineWebber.

That could be what Warren Buffett was saying Tuesday after the brokerage upgraded the beaten-down shares of his holding company.

Berkshire Hathaway Inc. (ticker symbol: BRK/B), the investment company run by billionaire Buffett, surged after a PaineWebber Group analyst said the business was trading at its lowest valuation in 17 years.

The stock jumped $108, or 8%, to $1,532 on the NYSE. It was down 23% for the year through Monday, prompting PaineWebber’s Alice Schroeder to raise her rating to “buy” from “attractive.”

“An investor who buys today should reasonably expect to achieve returns of 15% to 35% over the next few years,” Schroeder said in a note to investors. “Berkshire is now trading at its lowest valuation relative to book value since 1983.”

In 1999, Berkshire shares fell 20%, their first down year since 1990. Schroeder said the stock has been “trading around 50% below intrinsic value,” its decline partly fueled by rumors that Buffett was ill and by fears that the company’s insurance holdings may be sued by tobacco companies.

But Berkshire said last week that Buffett, who will turn 70 this year, is in good health. And Schroeder said the company hasn’t been named in any suits.