Warren Buffett by Todd A. Finkle

Author:Todd A. Finkle
Language: eng
Format: epub
Tags: BIO003000, Biography & Autobiography/Business, BUS036000, Business & Economics/Investments & Securities/General
Publisher: Columbia University Press
Published: 2023-03-14T00:00:00+00:00

2011: Lubrizol Corporation

Berkshire Hathaway bought Lubrizol Corporation for $9.7 billion cash in March 2011.13 The company was founded in 1928 in Cleveland, Ohio, and is now headquartered in nearby Wickliffe. Lubrizol specializes in producing chemicals such as engineered polymers, coatings, industrial lubricants, engine oil additives, specialty chemical products, and piping systems.

The things that made this purchase attractive to Buffett will be familiar to anyone who has read this far:

1. Return on equity (ROE) equal to 34 percent

2. A wide moat, courtesy of the company’s 1,600 patents

3. Pricing power, which Buffett says is the single most important factor in evaluating a business

4. Steadily rising dividends, from $1.04 per share in 2005 to $1.39 in 2010

5. Earning two-thirds of its revenue from outside the United States

6. Low unionization

7. Reasonably priced stock (Buffett paid $135 a share, or thirteen times earnings and twelve times forecasted earnings for the next year)

8. Good, stable management14

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