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 Both conglomerates posted record profit in 2013, with Berkshire
recording $19.5 billion of net income and $15.14 billion of
operating income while Icahn Enterprises, a so-called master limited
partnership, posted a $1.03 billion profit.
Berkshire owns more than 80 businesses including the BNSF Railway
and Geico car insurance, and shares such as Wells Fargo & Co <WFC.N>
and Coca-Cola Co <KO.N>. Icahn Enterprises owns stakes in companies
like auto parts maker Federal Mogul Corp <FDML.O>, and through
investment in an Icahn hedge fund stocks such as Apple Inc <AAPL.O>
and Herbalife Ltd <HLF.N>.
The two companies' shares have performed much differently so far
this year. Berkshire's Class A shares closed on Friday at $183,772,
after touching a record high earlier in the day. Meanwhile, Icahn
Enterprises shares closed Friday at $116.69, which was 22 percent
below its record set in December.
According to Barron's, Berkshire looks like a better buy.
Berkshire trades at 1.36 times its year-end book value of $134,973
per share, and the newspaper said it may trade at a discount to
intrinsic value, citing Buffett's repeating in his annual
shareholder letter this month that Berkshire's intrinsic value "far
exceeds" its book value.
Assuming some profit improvement, Berkshire's book value could
approach $145,000 per share by year end, Barron's said, or 1.27
times the current share price.
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That would be close to the 1.2 multiple at which Buffett, 83, said
in the letter he would be "aggressive" in buying back stock, after
buying back none in 2013.
In contrast, Barron's said Icahn Enterprises' share price is nearly
50 percent above what the company calls its "indicative asset
value."
The newspaper said that price "looks excessive" because the company
wholly owns only a small group of businesses, and its performance
hinges on Icahn's continued investing success.
"Icahn, at 78, continues to deliver," Barron's said. "But the
current price of Icahn Enterprises discounts a lot more success by
the billionaire. Berkshire looks like a better bet."
(Reporting by Jonathan Stempel in New
York; editing by Meredith Mazzilli)
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