As the dust settles on Warren Buffett’s largest purchase ever, Wall Street analysts are now free to piece together the market implications of the move. Buffett’s Berkshire Hathaway Inc. announced this week that is it buying aerospace supplier Precision Castparts Corp. PCP 0.04% for a staggering $32.3 billion.
Benzinga had the chance to talk to IBISWorld aerospace analyst Maksim Soshkin about the opportunity Buffett sees in Precision Castparts and what the deal means for the aerospace and oil & gas industries.
Value Play
Buffett has long been known as a patient value investor, and Soshkin sees plenty of long-term growth exposure for Precision. “The company is an essential supplier to aircraft manufacturers and we expect the Global Commercial Aircraft Manufacturing industry to grow at more than twice the rate of the global economy,” he told Benzinga.
Soshkin explained that the company’s product diversification also insulates it from the level of company-specific risk associated with other names within the aerospace industry.
“Buffett has bought a company that is not exciting, but plays a fundamental role in a sector that will grow due to its reliance on long-term global trends such as the continued development of emerging markets,” he added.
M&A Trend
According to Soshkin, the Berkshire deal is…
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