Precision Castparts (NYSE:PCP)
missed analyst estimates for revenue and EPS in its first-quarter
results, yet the stock moved sharply higher on the day. The company has
disappointed investors with its past few earnings reports, but that
wasn't enough to stop Warren Buffett's Berkshire Hathaway
from adding to its position in the stock. Despite the disappointments,
or possibly because of them, the stock has become a value proposition.
Let's look at what happened in its first quarter.
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According to SEC filings, Warren Buffett's Berkshire Hathaway increased its stake in Precision Castparts Corp. (NYSE:PCP) in the fourth quarter of 2014. In October, Precision Castparts reported second-quarter earnings that came in below estimates,
followed by a January pre-announcement that earnings would be below
expectations in its third quarter as well. Consequently, the stock is
down 13% year to date.
But Buffett's Berkshire Hathaway is known to ignore market sentiment
in favor of investing where its management sees value, so let's take a
closer look at the growth prospects for Precision Castparts Corp.
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