Latest news with #BRK.B
Yahoo
2 hours ago
- Business
- Yahoo
Warren Buffett Just Spent $1.8 Billion on 7 Stocks. Here's the Best of the Bunch
Buffett has struggled to find good value among larger companies over the last 3 years. Berkshire Hathaway invested $3.2 billion in eight stocks last quarter, but one company remains undisclosed. Of the rest, one stands out as an incredible value right now. 10 stocks we like better than Constellation Brands › Warren Buffett is one of the most widely followed investment managers in the world. And there's good reason for that. His 60-year run at Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has been nothing short of phenomenal. Investors who followed Buffett into the company have realized a compound average annual return of about 20% since Buffett took over the business in 1965. That's nearly twice the average annual return of the S&P 500. But it appears that Buffett has struggled in recent quarters to find great ways to deploy Berkshire's growing cash reserves. His potential best opportunities are getting only a small amount of capital infusion, as it appears that he's determined that many of the best large-cap stocks are overvalued. As a result, Berkshire put only $3.2 billion of cash into equities in the first quarter, leaving about $347 billion in cash and Treasury bill investments. Some of that $3.2 billion went into an undisclosed stock exempted from disclosure by the Securities and Exchange Commission. The rest, which appears to be about $1.8 billion, went into seven different stocks reported on Berkshire's quarterly 13F filing. One of those stocks stands out as an incredible value for investors right now, and it could be worth adding to your portfolio. Buffett admits he would love to buy more stocks. "Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned," he wrote in his letter to shareholders in February. But for Buffett to buy shares in a company, they must be offered, and offered at good value. Evidently he saw only a handful of stocks that looked like good values last quarter. Here are the seven Berkshire has disclosed so far: Heico Verisign Sirius XM Pool Corp. Domino's Pizza Constellation Brands (NYSE: STZ) Occidental Petroleum It's worth pointing out that all of these businesses are relatively small. Occidental Petroleum sports the largest market cap of the group at $42 billion. And Berkshire already owns nearly 27% of that company. Buffett doesn't see a lot of opportunities for Berkshire to invest tens of billions in a great company trading at a fair value. With Buffett strategically selling off some holdings while Berkshire's subsidiaries generate considerable free cash flow, the cash is piling up. Everyday investors can invest as much money as they want in any of the seven companies above. But some of them are arguably better values than others, especially considering price movements since Buffett's purchases, some of which date all the way back to early January. Of the seven, there's one that looks like a particularly good value right now. All seven companies are great businesses. Each has at least one source of competitive advantage, and they generally trade for good value relative to earnings. But if I had to choose one of Buffett's latest purchases to invest my own money in, it would be Constellation Brands. Constellation Brands is the owner of top Mexican beer brands like Corona and Modelo. It absolutely dominates U.S. sales for Mexican lagers. It also owns several wine and spirits brands, although its portfolio got a little bit smaller when it divested its mainstream wine brands earlier this month. Constellation is refocusing its portfolio on high-end brands. The beer business is its most important, accounting for over 80% of sales and over 90% of operating income in fiscal 2025. It has a stranglehold on the Mexican beer import category in the U.S. The company said it accounts for over 90% of spending in the segment. And it's seen strong growth in sales for both Modelo and its smaller Pacifico brands over the past year, despite secular headwinds against the overall beer category. Total alcohol consumption appears to be declining, especially among younger generations, and new entrants like hard seltzer and ready-to-drink cocktails continue to eat into beer's market share. Those headwinds and a new tariff this year on Mexican imports into the United States have led many investors to sell the stock. A disappointing earnings report in January didn't help, either. The stock currently trades more than 20% below where it started the year. But the outlook for the business is strong. Management expects sales growth in the low-single-digit range over the next three years as the wine and spirits business continues to drag down the beer business. Strategic divestments over time could refocus more of the business on higher-margin and growth opportunities. Overall, management also expects its operating margin to expand 1 to 2 percentage points from last year's levels by 2028. The expected net result is $6 billion to $7 billion in free-cash-flow generation over the next three years, and management has earmarked about $4 billion of that for share repurchases. That would reduce its current share count by over 13% at its current price. Management forecasts it'll buy up about 9% of shares outstanding over the next three years, with expectations that the price of the stock will rise. Given the resilience of Constellation's beer brands and management's focus on capital returns and high-margin opportunities, investors should see strong earnings growth after adjusting for divestments. Nonetheless, the stock trades for less than 14 times forward earnings estimates. That makes it worth considering as an addition to any value investor's portfolio right now. Before you buy stock in Constellation Brands, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Constellation Brands wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Adam Levy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Domino's Pizza, and VeriSign. The Motley Fool recommends Constellation Brands, Heico, and Occidental Petroleum. The Motley Fool has a disclosure policy. Warren Buffett Just Spent $1.8 Billion on 7 Stocks. Here's the Best of the Bunch was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
4 days ago
- Business
- Yahoo
Billionaire Warren Buffett Is Buying Shares of a Mystery Stock: Here's Everything We Know
Berkshire Hathaway's first-quarter 13F contained a confidential treatment tag, which means Warren Buffett is building up a position in secrecy. Berkshire's first-quarter operating results provide a big clue that helps narrow down the sector(s) where this mystery stock can be found. While a former holding may be Buffett's mystery stock, a handful of large-scale companies ($50 billion-plus in market cap) from a specific sector could be the right answer. 10 stocks we like better than Berkshire Hathaway › Despite an endless sea of earnings reports and economic data releases, there are few events more anticipated by the investing community than the quarterly filing of Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) Form 13F with the Securities and Exchange Commission (SEC). A 13F provides investors with a snapshot of which stocks Wall Street's leading asset managers have been buying and selling, and it has to be filed no later than 45 calendar days following the end to a quarter. In other words, Berkshire's 13F lifts the hood for professional and everyday investors and allows them to see which stocks Buffett purchased and sold. Thanks to Berkshire's May 15-filed 13F, along with various other regulatory filings, we know that Buffett was a buyer of 13 stocks during the March-ended quarter, as well as a seller of eight stocks. Even though the Oracle of Omaha has been a net-seller of equities for 10 consecutive quarters, there's something about knowing which stock(s) Buffett is buying that tugs on the heartstrings and pocketbooks of investors. But what really stood out about Berkshire Hathaway's first-quarter 13F filing with the SEC was the attached confidential treatment clause. On rare occasion, select money managers (often prominent billionaire investors) can request confidential treatment from regulators to not report one or more existing positions on their quarterly filed 13F. The reason a fund manager would request this is because investors would pile in and drive up the share price if the position were publicly revealed. If a high-profile money manager with a sizable Wall Street following can quietly build up their stake in a public company, they can likely do so at an advantageous price. Over the last decade, Warren Buffett has leaned on this confidential treatment provision a couple of times. Most recently, Berkshire's billionaire chief began building up a large position in property and casualty insurer Chubb (NYSE: CB) under the secrecy of the confidential treatment tag. Between July 1, 2023 and March 31, 2024, Buffett green-lit the purchase of nearly 26 million shares of Chubb, which was worth about $6.7 billion as of the end of March 2024. In the two trading days after this position was unmasked in mid-May 2024, Chubb stock rallied by more than $21 per share. Although Warren Buffett is being allowed to build up his position in secrecy, select filings from Berkshire Hathaway can help narrow down which stock(s) its billionaire chief is buying. For example, when Buffett has previously requested the confidential treatment tag, it's been for a sizable purchase (often a $4 billion to $8 billion stake). Considering that Buffett's company would absolutely be required to file a Form 4 with the SEC if its stake topped 10% (this figure is often 5% for beneficial owners), we know it has to be a large business. While a relatively inexpensive, brand-name company like Stanley Black & Decker might speak to Warren Buffett's knack for understanding consumer behaviors, it's only a $10 billion company. The company the Oracle of Omaha is secretly investing in likely has a market cap of $50 billion or considerably larger. This would allow Berkshire to invest billions of dollars without surpassing a roughly 5% to 10% stake. In addition to knowing that Buffett is buying shares of a big company, Berkshire Hathaway's first-quarter operating results and 13F help us pinpoint which area of focus this company can be found. Each quarter, Berkshire Hathaway's operating results provide a comparative breakdown of its cost basis, net unrealized gains, and fair value for its three investment areas of focus. By examining Berkshire's cost bases in these three areas, and comparing to the company's buying and selling activity via its 13F, we can put two and two together to figure out where Warren Buffett is doing his buying. In the "Banks, insurance and finance" category, Berkshire's cost basis fell from $15.71 billion in the fourth quarter (Q4 2024) to $14.27 billion in the March-ended quarter (Q1 2025). This drop is explained by the ongoing selling activity in Bank of America, as well as the disposition of Berkshire's stake in Citigroup. The second category, "Consumer products," showed a cost basis increase from $12.66 billion in Q4 2024 to $13.76 billion in Q1 2025. This can be entirely explained by Buffett's aggressive purchase of spirits stock Constellation Brands. The third category is "Commercial, industrial and other," whose cost basis jumped from $47.14 billion in Q4 2024 to $49.1 billion in Q1 2025. With only a few hundred million dollars in purchases for this broad-based category via Berkshire's 13F, it's clear that Buffett's mystery stock resides in this category. Lastly, we also know it's not any of Berkshire's existing holdings, since any buying activity would have shown up in the 13F or via Form 4 filings with the SEC. At the same time, there's plenty we can make logical guesses about, but don't know with any certainty. Arguably the biggest issue is that the "Commercial, industrial and other" segment comprises a boatload of potential sectors, including technology, healthcare, energy, and industrials. Almost 280 publicly traded companies have a market cap of at least $50 billion, and 136 of these companies can be traced back to the tech, healthcare, energy, and industrial sectors. That's a lot of dart-throwing! Historically, we know that Buffett isn't a huge fan of healthcare stocks, mainly because of the time and attention needed to keep up on clinical studies and Food and Drug Administration approvals. Something similar can be said about technology stocks, whose innovations aren't often fully understood by the Oracle of Omaha. For instance, even though Apple is one of Wall Street's most innovation-driven tech stocks, Buffett's attraction to Berkshire's No. 1 holding by market value has everything to do with its premier capital-return program and customers' loyalty toward Apple's physical products, including iPhone, Mac, and iPad. With this being said, it's unlikely to be a tech stock. Removing tech and healthcare leaves 54 potential stocks Buffett could be purchasing in secret in either the energy or industrial sectors. Though purchasing an energy stock in secret is more plausible than a tech stock in Buffett's portfolio, it's still unlikely. Energy has rarely played a large role in Berkshire's investment portfolio dating back to the start of the century. At the moment, combined investments in Chevron and Occidental Petroleum have given Buffett's company some of its largest energy exposure of the century. With two integrated oil and gas companies already among Berkshire's largest holdings, the addition of a third large energy stock seems improbable. The signs would appear to point to an industrial sector company, which would speak to Buffett's roots of investing in American manufacturing companies. Last month, I laid out my case why United Parcel Service (NYSE: UPS) is most likely the secret stock Warren Buffett is buying. UPS is a former Buffett stock that maintains clear-cut competitive advantages, has a robust capital-return program, and is historically cheap. However, there are other potentially inexpensive industrial stocks that I can't eliminate as possible purchase candidates. For instance, UPS rival FedEx (NYSE: FDX) is another logical buy candidate. Logistics companies represent the heart of the American economy, and Buffett has strongly cautioned investors not to bet against America. In recent quarters, FedEx has found itself on better financial footing than UPS. Though Buffett hasn't made a sizable investment in a defense company in a long time, Lockheed Martin (NYSE: LMT) might make sense. Lockheed losing out on a contract to build the next-generation of fighter jets for the Air Force to Boeing has created a temporary price dislocation that might speak to Berkshire's billionaire chief. It could even be something as simple as heavy construction giant and Dow Jones Industrial Average component Caterpillar (NYSE: CAT). While Buffett isn't a fan of mining companies, he's also not oblivious to companies like Caterpillar that offer large-scale competitive advantages. Buffett's mystery stock is a big (brand-name) company that isn't listed in Berkshire's 13F, and it's more than likely a company you'll find in the industrial sector. But narrowing it down any more than this is a guessing game. Before you buy stock in Berkshire Hathaway, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Berkshire Hathaway wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!* Now, it's worth noting Stock Advisor's total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Citigroup is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, Chevron, and FedEx. The Motley Fool recommends Constellation Brands, Lockheed Martin, Occidental Petroleum, and United Parcel Service. The Motley Fool has a disclosure policy. Billionaire Warren Buffett Is Buying Shares of a Mystery Stock: Here's Everything We Know was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
5 days ago
- Business
- Globe and Mail
Berkshire Near All-time Highs: Could This Be Buffett's Final Defining Act?
Berkshire Hathaway (NYSE: BRK.B) is trading near record highs, Warren Buffett is stepping down, and $347 billion in cash sits idle. Is this a perfect opportunity to buy more, or a warning sign? This video breaks down the leadership transition, latest earnings, stock moves, and valuation to help you decide whether to buy, hold, or wait. *Stock prices used were the market prices of May 23, 2025. The video was published on June 5, 2025. Should you invest $1,000 in Berkshire Hathaway right now? Before you buy stock in Berkshire Hathaway, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!* Now, it's worth noting Stock Advisor 's total average return is789% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Rick Orford has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
Globe and Mail
29-05-2025
- Business
- Globe and Mail
Berkshire Moves Above 200-Day SMA: How to Play the Stock
Shares of Berkshire Hathaway Inc. ( BRK.B ) continue to trend up, driven by its dominant market presence, diverse business activities, and, above all, the name Warren Buffett. BRK.B is now trending above its 200-simple moving average (SMA), indicating the possibility of an uptrend ahead. Shares closed at $503.11 yesterday, a 7.2% discount from its 52-week high of $542.07, indicating room for growth. The 200-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as it is the first marker of an uptrend or downtrend. Berkshire Price Movement Vs. 200-Day Moving Average Berkshire's Price Performance YTD Shares of BRK.B have gained 11% year to date, underperforming the industry 's increase of 15.8% but outperforming the Finance sector's increase of 4.8% and the Zacks S&P 500 composite's decline of 0.3% in the said time frame. Berkshire vs. Industry, Sector, S&P 500 Shares of Chubb Limited CB and The Progressive Corporation PGR have gained 5.5% and 15.2% year to date, respectively. Chubb, a leading global provider of property and casualty (P&C) insurance and reinsurance, is committed to tapping into the growth opportunities within the middle-market segment both in domestic and international markets. To drive long-term growth, the company is strengthening its core package offerings and expanding its portfolio of specialty products. Additionally, Chubb is advancing its strategic priorities through focused investments in key initiatives. Progressive, one of the largest auto insurance groups in the United States, is poised to record consistent profitability, thanks to its robust market position, diverse range of products and services, and strong underwriting and operational expertise. The company has refined its strategy by placing greater emphasis on auto bundling, minimizing exposure to high-risk properties and advancing segmentation efforts through the introduction of new products. BRK.B Shares Are Trading at a Premium The stock is overvalued compared with its industry. It is currently trading at a price-to-book multiple of 1.65, higher than the industry average of 1.62. While Berkshire is relatively cheap compared to Progressive, it is expensive compared to Chubb. Average Target Price for BRK.B Suggests Upside Based on short-term price targets offered by four analysts, the Zacks average price target is $541.50 per share. The average suggests a potential 7.6% upside from the last closing price. What's Working in Favor of Berkshire Hathaway? Berkshire Hathaway's insurance segment, which accounts for approximately one-quarter of its total revenues, is well-positioned for long-term growth. This strength is likely to be driven by expanded market exposure, disciplined underwriting and favorable pricing dynamics. As the insurance business grows, it increases the company's float, boosts earnings and improves return on equity. Beyond insurance, the company's other major segments — Utilities and Energy, as well as Manufacturing, Service, and Retail — are more sensitive to economic fluctuations. The Utilities and Energy segment has benefited from greater contributions by Burlington Northern Santa Fe Corp., though challenges such as an unfavorable business mix and declining fuel surcharge revenues remain. Still, rising demand for utilities is expected to support future earnings growth. The Manufacturing, Service and Retail divisions are also poised to benefit from a stronger economic environment, with increased consumer demand driving both revenues and margin expansion over time. With a substantial cash reserve, Berkshire Hathaway continues to pursue strategic acquisitions, ranging from transformative large-scale deals to smaller bolt-on acquisitions that enhance current operations. The company has built a strong balance sheet, supported by more than $100 billion in cash, minimal debt, and a high credit rating. This financial strength also allows Berkshire to consistently repurchase shares, a strategic use of capital that effectively returns value to shareholders. Berkshire Hathaway's Return on Capital Return on equity ('ROE') in the trailing 12 months was 7.2%, underperforming the industry average of 7.8%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders' funds. It is noteworthy that though BRK.B's ROE is lagging the industry average, the company has been continuously generating improved ROE. The same holds true for return on invested capital (ROIC), which has increased every year since 2020. This reflects BRK.B's efficiency in utilizing funds to generate income. However, ROIC in the trailing 12 months was 5.7%, lower than the industry average of 5.9%. Mixed Analyst Sentiment on BRK.B The Zacks Consensus Estimate for 2025 earnings implies a 6.7% year-over-year decrease, while the same for 2026 suggests a 5% increase. The consensus estimate for 2025 earnings has moved 0.2% north while that for 2026 has moved 2.7% south in the past seven days. How to Play BRK.B Shares Berkshire Hathaway is a conglomerate with more than 90 subsidiaries engaged in diverse business activities. Thus, holding shares of Berkshire Hathaway renders dynamism to shareholders' portfolios. BRK.B has delivered significant value to shareholders for almost six decades under the leadership of Buffett. All are now waiting to see how the behemoth fares when Greg Abel succeeds Warren Buffett as CEO of Berkshire, effective Jan. 1, 2026. Warren Buffett will continue to be the company's executive chairman. Given Berkshire Hathaway's trading at a premium valuation, unfavorable return on capital and the mixed analyst sentiments surrounding the company, it is better to adopt a wait-and-see approach on this Zacks Rank #3 (Hold) stock. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months. Free: See Our Top Stock And 4 Runners Up Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chubb Limited (CB): Free Stock Analysis Report Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report The Progressive Corporation (PGR): Free Stock Analysis Report
Yahoo
29-05-2025
- Business
- Yahoo
Berkshire Moves Above 200-Day SMA: How to Play the Stock
Shares of Berkshire Hathaway Inc. (BRK.B) continue to trend up, driven by its dominant market presence, diverse business activities, and, above all, the name Warren Buffett. BRK.B is now trending above its 200-simple moving average (SMA), indicating the possibility of an uptrend ahead. Shares closed at $503.11 yesterday, a 7.2% discount from its 52-week high of $542.07, indicating room for growth. The 200-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as it is the first marker of an uptrend or downtrend. Image Source: Zacks Investment Research Shares of BRK.B have gained 11% year to date, underperforming the industry's increase of 15.8% but outperforming the Finance sector's increase of 4.8% and the Zacks S&P 500 composite's decline of 0.3% in the said time frame. Image Source: Zacks Investment Research Shares of Chubb Limited CB and The Progressive Corporation PGR have gained 5.5% and 15.2% year to date, a leading global provider of property and casualty (P&C) insurance and reinsurance, is committed to tapping into the growth opportunities within the middle-market segment both in domestic and international markets. To drive long-term growth, the company is strengthening its core package offerings and expanding its portfolio of specialty products. Additionally, Chubb is advancing its strategic priorities through focused investments in key one of the largest auto insurance groups in the United States, is poised to record consistent profitability, thanks to its robust market position, diverse range of products and services, and strong underwriting and operational expertise. The company has refined its strategy by placing greater emphasis on auto bundling, minimizing exposure to high-risk properties and advancing segmentation efforts through the introduction of new products. The stock is overvalued compared with its industry. It is currently trading at a price-to-book multiple of 1.65, higher than the industry average of 1.62. Image Source: Zacks Investment Research While Berkshire is relatively cheap compared to Progressive, it is expensive compared to Chubb. Based on short-term price targets offered by four analysts, the Zacks average price target is $541.50 per share. The average suggests a potential 7.6% upside from the last closing price. Image Source: Zacks Investment Research Berkshire Hathaway's insurance segment, which accounts for approximately one-quarter of its total revenues, is well-positioned for long-term growth. This strength is likely to be driven by expanded market exposure, disciplined underwriting and favorable pricing dynamics. As the insurance business grows, it increases the company's float, boosts earnings and improves return on insurance, the company's other major segments — Utilities and Energy, as well as Manufacturing, Service, and Retail — are more sensitive to economic fluctuations. The Utilities and Energy segment has benefited from greater contributions by Burlington Northern Santa Fe Corp., though challenges such as an unfavorable business mix and declining fuel surcharge revenues remain. Still, rising demand for utilities is expected to support future earnings Manufacturing, Service and Retail divisions are also poised to benefit from a stronger economic environment, with increased consumer demand driving both revenues and margin expansion over a substantial cash reserve, Berkshire Hathaway continues to pursue strategic acquisitions, ranging from transformative large-scale deals to smaller bolt-on acquisitions that enhance current operations. The company has built a strong balance sheet, supported by more than $100 billion in cash, minimal debt, and a high credit financial strength also allows Berkshire to consistently repurchase shares, a strategic use of capital that effectively returns value to shareholders. Return on equity ('ROE') in the trailing 12 months was 7.2%, underperforming the industry average of 7.8%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders' funds. It is noteworthy that though BRK.B's ROE is lagging the industry average, the company has been continuously generating improved ROE. Image Source: Zacks Investment Research The same holds true for return on invested capital (ROIC), which has increased every year since 2020. This reflects BRK.B's efficiency in utilizing funds to generate income. However, ROIC in the trailing 12 months was 5.7%, lower than the industry average of 5.9%. Image Source: Zacks Investment Research The Zacks Consensus Estimate for 2025 earnings implies a 6.7% year-over-year decrease, while the same for 2026 suggests a 5% increase. The consensus estimate for 2025 earnings has moved 0.2% north while that for 2026 has moved 2.7% south in the past seven days. Image Source: Zacks Investment Research Berkshire Hathaway is a conglomerate with more than 90 subsidiaries engaged in diverse business activities. Thus, holding shares of Berkshire Hathaway renders dynamism to shareholders' portfolios. BRK.B has delivered significant value to shareholders for almost six decades under the leadership of Buffett. All are now waiting to see how the behemoth fares when Greg Abel succeeds Warren Buffett as CEO of Berkshire, effective Jan. 1, 2026. Warren Buffett will continue to be the company's executive chairman. Given Berkshire Hathaway's trading at a premium valuation, unfavorable return on capital and the mixed analyst sentiments surrounding the company, it is better to adopt a wait-and-see approach on this Zacks Rank #3 (Hold) can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chubb Limited (CB) : Free Stock Analysis Report Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report The Progressive Corporation (PGR) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
