Warren Buffett tours the grounds of Berkshire Hathaway’s annual meeting in Omaha, Nebraska.
David A. Grogan | CNBC
Berkshire Hathaway Stocks fell on Monday despite hitting all-time highs following strong gains from the Warren Buffett Group over the weekend.
Berkshire’s Class A shares were last down 2.2%. Earlier in the session, the stock hit an all-time intraday high of $647,039, according to FactSet data. Shares were trading at $615,356.
Meanwhile, Class B shares fell 1.9%. At one point, the stock hit an intraday record high of $430. It closed at $409.14.
Berkshire on Saturday reported fourth-quarter operating profit of $8.481 billion, up about 28% from the $6.625 billion in the year-ago period, driven by big gains in its insurance business. Operating profit refers to the profit of companies in the insurance, railroad, and utility sectors.
Meanwhile, Berkshire’s cash holdings also rose to record levels. The conglomerate had $167.6 billion in cash in the fourth quarter, surpassing the record $157.2 billion held by the conglomerate in the previous quarter.
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Berkshire Hathaway Class A
However, one analyst said he expects the stock to be fairly valued, saying any upside potential is already priced into the name given the conglomerate’s rosy earnings outlook.
“BRK shares have significantly outperformed their financial services peers in 2023, supported by a relatively strong earnings outlook. “We expect continued solid earnings from BRK’s diverse group of companies,” James Shanahan of Edward Jones wrote on Saturday. “However, in our view, the current share price reflects these positive aspects.”
In fact, the billionaire investor said in his annual letter, also released last weekend, that he expects Berkshire to only marginally outperform the average company from now on, especially since the conglomerate has a net worth of 6% of all S&P 500 companies reached.
“With our current business mix, Berkshire should perform slightly better than the average American corporation and, more importantly, also operate with significantly lower risk of permanent loss of capital,” Buffett said. “Anything other than ‘slightly better’ is wishful thinking.”
Buffett added that only a handful of companies are likely to “make a real difference” through acquisitions. The last major deal Berkshire closed was in 2022, when it bought insurer and conglomerate Alleghany for $11.6 billion.
— CNBC’s Michael Bloom and Chris Hayes contributed to this report.
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2024-02-26 21:09:40
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