NNI - Nelnet: A Baby Berkshire Hathaway That Deserves to Be in Your Portfolio Today
Plenty of value investors want to find the next Berkshire Hathaway . The company taken over by legendary investor Warren Buffett 60 years ago has put up phenomenal returns for shareholders since he bought shares of the textile mill at a price of $7.50 and turned it into a sprawling investing conglomerate. Today, the company's publicly traded Class A shares go for about $462,000, roughly 62,000 times his original purchase price. This means if you put just $100 into Berkshire Hathaway at the same time as Buffett it would be worth $6.2 million today. That is some life-changing wealth creation for people who held shares for the long haul.
There are plenty of businesses that claim to be the next Berkshire Hathaway. My best candidate is small-cap conglomerate in Nebraska (as is Berkshire) called Nelnet (NYSE: NNI) , a business with a consistent track record of creating value for shareholders. Here's why the stock belongs in your portfolio today.
Founded in the 1990s, Nelnet is a diversified company focused on the financial and lending sector. It went public in 2004 when it was still mainly an originator of student loans. Since then, it has expanded and become a full-fledged conglomerate and has a great track record to show for it. Book value per share , including dividends (a standard metric for valuing a financial stock), compounded by 17.2% a year from 2004 to 2021, outpacing the 10.6% total return for the S&P 500 over that same time frame. This isn't quite as good as the 20.1% compound growth Berkshire Hathaway put up, but it's close.
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Nelnet: A Baby Berkshire Hathaway That Deserves to Be in Your Portfolio Today