Five 'UNHEARD' of businesses that beat WarrenBuffett's Berkshire Hathaway

J A NUAR Y -

MARCH 2 0 1 5

The famous chart below shows Berkshire Hathaway beating the S&P500 index. The difference in total return since 1967 is a $1,000 invested

in S&P 500 gives an absolute return of $20,600 vs. BerkshireHathaway's absolute return of $10m.

DID YOU KNOW?

Berkshire Hathaway beatsApple in total stock returns!

And Apple is the biggest company bymarket capitalization with current

market value $650bn.

Below is the comparative returns of Apple vs. Berkshire, since the start ofApple's IPOs.

HOWEVER...

There are companies that havebeaten Warren Buffett at his

own game.

ONE

This company is the most diversified health care company inthe U.S. providing health care coverage and benefits services.

Known facts

They served over 70m people in the U.S. and generated revenue of over$100bn.

On the financial side, the company made several acquisitions including $12.8bn for Catamaran Corp.

The company has gone through 5 stock split in its stock markethistory (all 2 for 1 split).

UnitedHealth would have earned you 'EIGHT' times thereturn than Berkshire from 1990 to present.

TWO

ABOUT

Established in 1984, Cisco System is a multinational tech companyselling networking equipment.

Ten years later its sales exceeded $1bn. The company has anacquisition-driven business model with 192 acquisitions since

1993 to the present date.

FUN FACTS

During the dot-com bubble, Cisco used to be the most valuablecompany with a market capitalization reaching $500bn in

March 2000.

Cisco vs. Berkshire total returns

Chart explanationsWhen Cisco System became the most valuable company in 2000, a

$10,000 investment back in 1990 would earn you $6m bucks within tenyears.

Since 2000, Cisco has not regained even half their stock losses.

However, it stills beat Berkshire by a whopping 10.5 times, despite notmaking a new high for fifteen years!

In defense of Berkshire Hathaway, no company can grow forever, and thecompany is at its mature growth stage.

The best way to evaluate is to work out Berkshire Hathaway's compoundreturns since its inception to the market. (More from this later)

BEFORE GOING TO THE NEXT COMPANY, HERE ABREAKDOWN OF CISCO BREAKDOWN BY PRODUCT

CATEGORY:

THREE

Not from the UK? Don't worry, this UK-based bakery is the largest AND beats McDonalds,

regarding the number of outlets (in the UK, of course).

The company was found back in Tyneside (near Newcastle) back in 1939by John Greggs.

However, it took them twelve years to open their first store.

Now, Greggs had more than 1,671 outlets and employed 20,000 staff in theUK.

Fun fact

Greggs sell 130m sausage rolls a year.

Greggs has seen tremendous growth over the years and would earn you a total return that is 49 times greater than Berkshire!

How does Greggs achieve much greatresult?

Well, they consistently grew the business at a steady pace, along withincreasing the sales output per store over a long period.

The company manages to improve its sales per store output by142% since 1991, in nominal terms. Given that UK inflation increase

by 103%, then real sales per store output are 39%.

FOUR

Danaher Corp has five business segments:

- Environmental - Industrial technology

- Life sciences & Diagnostics - Dental

- Test & measurement

Danaher Corp total stock return performance has outpacedBerkshire by 3.45 times!

The secret to Danaher Corp. success

The acquisition of over 400 businesses since 1984.

Did you know?

It had changed its name three times from DMG, Inc. toDiversified Mortgage Investors, Inc. by 1978 and from the

name the company was in the real estate sector.

By 1984, it settled for Danaher Corp. to the present day.

The success of its acquisition-driven business model hasattributed to commanding a good market share in each of its

business segments

FIVE

Another UK business that sells clothes in stores and online.

The company was bought by J Hepworth & Son back in1981 and in 1986 the parent company changed its name to

Next PLC.

Next Plc has under performed Berkshire for most of its time in the market until recently!

However, we should be fair to Berkshire

They have been listed in the market longer than these outperformers

Berkshire is no longer a growth company but a mature business given its size

For a fairer comparison, we should measure stock performance based onthe average compound return since listing in the stock market

The table below shows the compound return since inception to thestock market. On that basis, Greggs has compiled the highest

compound annual return over the last 27 years! Buffett's Berkshire over the last 50 years has managed an average

compound annual return of 21%.

To be fair to the Oracle of Omaha, if the above companies still manage to achieve a21% compound annual return over a 5o year period, then they have achieved the

results of Berkshire!

However, this does not void the fact that by jumping out of Berkshire shares andbuying the above companies would earn you a 'superior' return than Warren

Buffett!!

Thanks for reading!

Are you interested in following the footsteps of the 'Oracle'?

INTERESTED IN ANOTHER FIVE COMPANIES BEATINGBUFFETT'S BERKSHIRE?

Then click here to read my piece on Seeking Alpha!

REFERENCES

1. Allfinancialmatters.com

2. Successstory.com

3. Splithistory.com

4. 10 facts about.com

5. Crunchbase.com

6. BBC.co.uk

7. Huffingtonpost.co.uk

8. Corporate.greggs.co.uk

9. The Sun.co.uk