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Warren Buffett tours the grounds at the Berkshire Hathaway annual shareholder meeting in Omaha, Nebraska.
David A. Grogan | cnbc
Berkshire Hathaway Shares rose on Monday after Warren Buffett’s group reported strong fourth-quarter earnings over the weekend.
Berkshire’s Class A and B shares each jumped more than 1.5%. Class A shares have risen more than 17% this year, while Class B shares have risen more than 18%. Berkshire was last valued at $930.1 billion, up from $905.5 billion at Friday’s close, according to FactSet.
Berkshire on Saturday reported fourth-quarter operating income of $8.481 billion, up nearly 28% from $6.625 billion in the year-ago period, due to a big gain in its insurance business. Operating income refers to profits from businesses related to insurance, railroads, and utilities.
Meanwhile, Berkshire’s cash level also reached a record high. The group had cash of $167.6 billion in the fourth quarter, surpassing the record of $157.2 billion held by the group in the previous quarter.
Berkshire Hathaway Class A
Still, one analyst said he expects the stock to be fairly valued, adding that any upside to the group’s good earnings outlook is already priced into the stock.
“BRK’s shares have significantly outperformed financial services peers through 2023, supported by a relatively strong earnings outlook,” Edward Jones’ James Shanahan wrote on Saturday. Expect solid earnings.” “However, in our view, the current share price reflects these positives.”
Investors shouldn’t expect Buffett’s often candid comments to help it reach $1 trillion quickly. In fact, the billionaire investor said in his annual letter released late last week that he expects Berkshire to perform only slightly better than the average company from here on out, especially since the group has a net worth of 6% of the total S&P 500 companies. Will reach to.
Buffett said, ‘With our current mix of businesses, Berkshire should perform slightly better than the average American corporation and, more importantly, it should operate with less risk of permanent loss of capital.’ However, anything beyond ‘a little better’ is wishful thinking.”
Buffett said the firm is likely to “really move the needle” through the acquisition of only a few businesses. Berkshire’s last big deal was in 2022, when it bought insurer and conglomerate Allegheny for $11.6 billion.
— CNBC’s Michael Bloom contributed to this report.
