Warren Buffett passed Carlos Slim yesterday to become the world’s second-richest person.
The 83-year-old Berkshire Hathaway Inc. chairman has a net worth of $63.4 billion, according to the Bloomberg Billionaires Index, up 4.3 percent year-to-date.
Berkshire said March 1 that its annual profit climbed to a record $19.5 billion on gains at its operating businesses, including railroad Burlington Northern Santa Fe, which Buffett bought in 2010. The Omaha, Nebraska-based company posted its biggest weekly advance in 14 months last week after Buffett told investors that the true value of his company has been rising faster than accounting metrics suggest.
“The value of his underlying holdings continue to grow,” said Patrick Brennan, co-chief investment officer at Hutchinson Capital Management, which oversees about $550 million including Berkshire shares. “The Burlington acquisition continues to look cheaper and cheaper by the day.”
Berkshire closed at $185,750 in New York yesterday after reaching a 52-week high in intraday trading.
Slim’s fortune has fallen $10.9 billion since the start of 2014 -- the most of any billionaire on the Bloomberg ranking -- as Mexico City-based America Movil SAB, the largest mobile-phone operator in the Americas, has plummeted 14 percent. He has a $62.9 billion net worth.
Lower Valuation
Regulators in Mexico are cracking down on America Movil’s dominance of the phone industry with new rules to fix its prices and force it to share its infrastructure with competitors. As a consequence, the operator’s profits in its home market will decline by about $1 billion in the next three years, according to Sanford C. Bernstein & Co. and Banco Itau BBA SA. America Movil has about seven out of ten of Mexico’s mobile-phone subscribers and 80 percent of landlines.
“The new regulations may intensify the current contraction of margins in Mexico,” said Lucio Aldworth, an analyst at Citigroup Inc., in a research note. “With this, we expect the consolidated margins of the biggest Latin American telecommunications operator to keep declining.”
America Movil trades at a lower valuation than its peers because of impending regulation in Mexico, uncertainty over mergers and acquisitions and expectations for slower growth, Aldworth said. “We don’t think any of those factors will improve enough in the short term to justify higher multiples,” he said.