Analysts Fault Buffett's Berkshire Hathaway for Lack of Financial Transparency

With Berkshire Hathaway shares having soared 31.6 percent over the last year, compared to a 16.9 percent total return with the S&P 500 index, you'd think that analysts would be recommending the stock first and asking questions later.

But no. They are concerned about the lack of financial disclosure from the company led by investment icon Warren Buffett.

"There’s actually a tremendous amount we don’t know about parts of this company," Meyer Shields, an analyst who covers the company for investment bank Keefe, Bruyette & Woods, told Newsweek. "It makes it incredibly difficult to assess the quality of earnings."

Berkshire's profit totaled $4.62 billion in the third quarter, down 8.7 percent from a year earlier.

"You would think that Warren would want to become a standard for transparency, especially after the opaqueness in our banking system in the last cycle and the shrouded secrecy contained in the proliferation of derivatives nearly bankrupted the system," hedge fund manager Doug Kass, president of Seabreeze Partners Management, told Newsweek.

One piece of information Berkshire did announce was an agreement last week to buy Detlev Louis Motorradvertriebs, a German motorcycle apparel and accessories retailer for 400 million euros ($452 million).

And Buffett says that may just mark the beginning of a love affair with the continent.

"Europe has hundreds of millions of people, high incomes, productive people, so it is a great place to be," the legendary investor told the Financial Times. "The U.S. is my first love, but I see terrific possibilities for us in Europe."

Clearly Buffett isn't concerned that the eurozone's economy grew only 0.9 percent last year. Indeed, the continent's economic weakness makes it just the kind of value play that attracts Buffett.

A whopping 85 percent of Berkshire's revenue now comes from the United States.

Buffett hopes the Detlev deal will be a "door opener" for more purchases in Europe. "There is nothing like a deal to get people's attention," he said. "This is smaller than something we would normally do, but it is a door opener. I like the fact that we have cracked the code in Germany."

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