To The Moon

1. The Trend in Berkshire Hathaway's 13F Filing: Cashing in on Technology at a High Level, and Shifting to a Left-Side Position in Industrials, Real Estate, and Utilities

After the market closed on August 14, 2025, $Berkshire Hathaway(BRK.B)$ $Berkshire Hathaway(BRK.A)$ filed its 13F report, which shows:

• Divestments: $Apple(AAPL)$ by 20 million shares (-6.7%), $Bank of America(BAC)$ by 26.3 million shares (-4.2%);

• Liquidations: $T-Mobile US(TMUS)$

• New Entries/Increases: $UnitedHealth(UNH)$ by 5.04 million shares, a small increase in $Nucor(NUE)$ , and both $Lennar(LEN)$ and $Lamar Advertising(LAMR)$ appearing on the list for the first time.

Investors who like to "copy" Buffett's investments might consider the following:

1) What does Buffett (or his two deputies) truly believe in? 2) Do the fundamentals of the four newly acquired stocks support the "Berkshire premium"? 3) What is the "margin of safety" for following suit?

II. $UnitedHealth(UNH)$ : Why is a $1.5 billion bet still being placed on this healthcare giant despite a profit squeeze?

Financial Quick Facts (Q2 2025)

• Revenue: $111.6 billion (+13% YoY), the 38th consecutive quarter of double-digit growth

• Adjusted EPS: $4.08, below the consensus estimate of $4.45;

• Medical Claims Ratio (MCR): 89.4%, up 430 basis points year-on-year, primarily contributing to the profit shortfall.

Core Logic: Aging + Pricing Power + Data Flywheel

• Demand Side: The US population aged 65 and over has exceeded 18%, and Medicare Advantage has added 505,000 new members, making it the fastest-growing segment for premiums.

• Supply Side: Optum's three business units (pharmacy, data analytics, and medical services) are synergistic, with per-member ARPU growing at a five-year CAGR of 8%.

• Valuation: 2025E PE ratio of 11x, below the five-year average of 16.8x, and a dividend yield of 3.2%, a decade high.

Risk Warning

• Regulation: Government adjustments to Medicare billing rules (V-28 risk model) may further reduce profits by 2-3 percentage points.

• Medical Inflation: The cost of GLP-1 weight-loss drugs has exceeded expectations, dragging down Optum's Rx profit margin from 4.3% to 3.7%.

Secondary Market Strategy

• Short-term: After the disappointing earnings report, the stock price has retreated to the $260-270 range, corresponding to a 2026E PEG of ≈1. This valuation has already partially priced in regulatory risk.

• Long-term: If the MCR returns to below 86%, EPS is expected to return to above $20 in 2026, and the current price implies an annualized return of ≥15%.

III. $Nucor(NUE)$ : Can the return of manufacturing and the green premium replicate the ten-fold growth of the previous cycle?

Financial Overview

• Q2 2025 revenue: $8.4 billion (-3.8% YoY), net profit: $690 million (-66% YoY), primarily due to a 15% year-on-year decline in steel prices.

• Gross profit margin: 18.5%, still above the industry average of 12%, thanks to cost advantages in scrap steel and electric arc furnaces.

Core Logic

• Demand Side: The U.S. Infrastructure Act and the Inflation Reduction Act are driving demand for steel for domestic infrastructure and new energy vehicles. U.S. steel demand is expected to grow at a CAGR of 3.5% from 2025 to 2027.

• Supply Side: Nucor's newly commissioned Kentucky sheet mill in 2025 will have an annualized capacity of 1.5 million tons. It will utilize 100% scrap steel and green electricity, resulting in a carbon emission intensity 70% lower than traditional blast furnaces and is expected to qualify for the EU CBAM tariff exemption premium.

• Return on Capital: ROIC of 17%, FCF conversion rate >70%, 50 consecutive years of dividend growth, and a 2025E dividend yield of 4.1%.

Key Variables

• Steel Price: If the price of hot-rolled coil falls below $600/ton, the company will break even.

• Scrap Steel Price: In 2025, affected by the new energy vehicle dismantling wave, scrap steel supply will increase by 8%, and there is room for cost reduction.

Secondary Market Strategy

• Cycle Bottom: The stock price has returned to the 2023 level, with a PB/P/E ratio of 1.4x, below the historical median of 1.8x.

• Event-Driven: The new plant's commissioning in Q4 2025 and the implementation of carbon tariff details could catalyze a valuation recovery to 2x PB/P/E ratio, corresponding to a share price of $160 (current price ~$130).

IV. $Lennar(LEN)$ : A High-Dividend Option Under the "Survivor" Logic in Real Estate

Financial Overview

• 17,000 new homes delivered in Q2 2025, generating $7.9 billion in revenue (up 12% YoY);

• Orders increased 3% YoY, with an average selling price of $419,000, flat;

• Net debt ratio is 26%, a historical low, with $3.8 billion in cash on hand.

Core Logic

• Policy: The 30-year mortgage rate fell from 7.3% to 6.1%, driving existing home inventory down to three months, the lowest level since 2000.

• Supply: Over the past decade, small and medium-sized builders have been eliminated, and the top five homebuilders' market share has increased from 22% to 36%. Lennar's land strategy has shifted to "asset-light" (with options accounting for 70%), and its return on equity has increased to 20%.

• Return on Capital: The combined shareholder return from buybacks and dividends in 2025 will be 6.5%.

Risk Warning

• If mortgage rates rise again to above 7%, order volume may return to negative growth.

• California and Texas account for 45% of revenue, and housing prices are highly volatile.

Secondary Market Strategy

• The current share price corresponds to a 2025E P/E ratio of 9x and an EV/EBITDA ratio of 7x, both below historical -1σ.

• If housing starts return to 1.3 million units in 2026, EPS is expected to rise to $15, with a target price of $180 (current price ~$140).

V. $Lamar Advertising(LAMR)$ : An Overlooked "Cash Flow Cow"

Financial Overview

• Q2 2025 revenue was $578 million (+5.2% YoY), and AFFO (Adjusted Cash Flow from Operating Income) was $235 million.

• AFFO/share was $2.30, with a dividend yield of 6.8%, marking five consecutive years of increases.

Core Logic

• Industry Barriers: US outdoor advertising has a 70% CR4 (Cost Per Share) ratio, with Lamar holding a 28% market share. Core assets are 30-year exclusive contracts for highways and airports.

• Digitalization: Digital billboards have risen to 32% of the market, with revenue per billboard three times that of traditional billboards, and EBITDA margins rising to 45%.

• REIT Structure: 90% of cash flow is required to be distributed as a dividend, leading to high interest rate sensitivity. With the current 10-year US Treasury yield at 3.8%, REIT valuations are expected to expand.

Risks

• Economic recession leading to advertiser budget cuts

• Local government environmental regulations on highway billboards.

Secondary Market Strategy

• 2025E AFFO is $9.20, with a P/AFFO ratio of 11x, below the historical average of 13x.

• Given the expectation of interest rate cuts, if the P/AFFO ratio returns to 13x, the corresponding share price would be $120 (current price ~$100).

VI. Portfolio Implications: How to Copy the Past? Fund Attribute Matching

• Defensive: $UnitedHealth (UNH)$ + $Lamar Outdoor Advertising (LAMR)$ (High Dividend + Weak Cycle);

• Cyclical Growth: $Nucor Corporation (NUE)$ + $Lenner Construction Company (LEN)$ (Leveraged Economic Recovery + Policy Catalyst).

Timing and Position Control

• Referencing Berkshire Hathaway's entry cost: $UnitedHealth (UNH)$ $311, $Nucor Corporation (NUE)$ $130, buy in batches within the -10% range;

• Stop-loss Discipline: If $UnitedHealth (UNH)$ $MFS Charter Income Trust (MCR)$ > 91% or LEN order growth turns negative, a reduction in holdings will be triggered.

Conclusion

• Berkshire's recent portfolio adjustments are not simply "high-low" swings; rather, they appear to be betting on three key long-term strategies:

• The rigid needs of an aging society $UnitedHealth(UNH)$ ;

• The return of manufacturing and the green premium $Nucor(NUE)$ ;

• High-dividend assets amid falling interest rates ( $Lennar(LEN)$ / $Lamar Advertising(LAMR)$.

• Interested investors should avoid blindly copying stocks. Instead, consider the underlying logic of "margin of safety + cash flow priority": buy when valuations correct but fundamentals haven't deteriorated, and use time and dividends to hedge against short-term volatility.

Open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with upcoming 0-commission, unlimited trading on SG, HK, and US stocks, as well as ETFs. Find out more here.

• 💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉

• 🎉The Cash Boost “Daily Draws” is Now Live – Come Join the Fun!

• Other helpful links:

  • How to open a CBA.

  • How to link your CDP account.

  • Other FAQs on CBA.

  • Cash Boost Account Website.