Latest news with #BRKB
Yahoo
2 days ago
- Business
- Yahoo
Should You Buy Berkshire Hathaway Stock While It's Under $500? Warren Buffett Gives Investors a Clear Answer.
Key Points Berkshire shares have declined 12% from their record high, but every Wall Street analyst following the company believes the stock is undevalued. Berkshire reported lower revenue and operating earnings in the second quarter, and tariffs could lead to lackluster financial results in future quarters. Warren Buffett is allowed to repurchase Berkshire stock when he believes its discounted versus its intrinsic value, but he has not repurchased a single share in four quarters. 10 stocks we like better than Berkshire Hathaway › Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) shares have dropped 12% since hitting a record high of $540 earlier this year. Yet, every Wall Street analysts following the company thinks the stock is undervalued at its current price of $477: Target prices range from $485 per share on the low end (implying 1% upside) to $597 per share on the high end (implying 25% upside). Nevertheless, before buying the dip, investors should consider Berkshire's latest quarterly results and Warren Buffett's actions concerning share buybacks. Here are the important details. Berkshire owns a collection of competitively advantaged businesses Berkshire Hathaway is a holding company that owns a diverse group of subsidiaries, most of which were hand selected by CEO Warren Buffett due to their sustainable economic moats and excellent leadership. The most consequential holdings are its insurance businesses, which generate investable capital in the form policy premiums that have not yet been paid out in claims. Buffett has invested those funds to great effect over the years. Under his leadership, Berkshire has acquired complete or partial stakes in outstanding businesses, including Apple, Coca-Cola, GEICO, and BNSF Railway. In turn, its book value per share -- a good measure for changes in intrinsic value -- increased 210% in the last decade, outpacing the 200% return in the S&P 500 (SNPINDEX: ^GSPC). Berkshire's revenue and operating earnings declined in the second quarter Berkshire shares dropped 3% after the company announced its second-quarter financial results earlier this month. Revenue fell 1% to $92.5 billion and operating earnings (which exclude gains and losses on stocks) declined 4% to $11.1 billion. The primary culprit was a 12% decrease in insurance underwriting profits, partially offset by a 19% increase in railway profits. Looking ahead, many economists expect tariffs imposed by President Trump to slow gross domestic product (GDP) growth, which could lead to more lackluster financial results from Berkshire. Argus analyst Kevin Heal recently wrote, "Berkshire's revenues are economically sensitive and often expand or contract along with the U.S. economy." The company is particularly vulnerable through its manufacturing, services, and retailing segment, which includes consumer goods brands such as Fruit of the Loom and Duracell, as well as quick service restaurants such as Dairy Queen. Berkshire is also vulnerable through its rail transportation segment, where tariffs could lead to lower freight volumes as consumer and business spending slow. Warren Buffett has not repurchased any Berkshire stock in four quarters Berkshire in some ways has become a victim of its own success. The company had a book value of $668 billion as of June 30, by far the largest of any American company. Book value is sometimes called GAAP net worth, and Berkshire's net worth is so prodigious that very few acquisitions or stock purchases could move the financial needle for the company. Buffett noted that problem in his 2023 shareholder letter. "There remain only a handful of companies in this country capable of truly moving the needle at Berkshire, and they have been endlessly picked over by us and by others," he wrote. "All in all, we have no possibility of eye-popping performance." Importantly, Buffett evidently thinks Berkshire stock is overvalued at its current price. I say that because after repurchasing $78 billion in stock over a 24-quarter period that began in 2018, he has not repurchased stock in the last four quarters. Berkshire's buyback program permits share repurchases any time Buffett believes the price is below the intrinsic value. So, it stands to reason that condition has not been satisfied recently. Put differently, Buffett has never believed Berkshire traded at a discount to its intrinsic value at any point in the past year. And shares have essentially traded sideways since the second quarter, so I doubt his opinion has changed. To that end, I think investors should either avoid the stock right now, or else keep purchases very small. 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 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 $649,544!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,113,059!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 185% 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 August 13, 2025 Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy. Should You Buy Berkshire Hathaway Stock While It's Under $500? Warren Buffett Gives Investors a Clear Answer. was originally published by The Motley Fool
Globe and Mail
3 days ago
- Business
- Globe and Mail
Diamond Hill Capital Boosts Stake in Berkshire Hathaway
Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Diamond Hill Capital Management Inc, managed by Ric Dillon, recently executed a significant transaction involving Berkshire Hathaway B (($BRK.B)). The hedge fund increased its position by 36,507 shares. Spark's Take on BRK.B Stock According to Spark, TipRanks' AI Analyst, BRK.B is a Outperform. Berkshire Hathaway B's strong financial performance is the primary driver of its score, aided by reasonable valuation metrics. Technical analysis indicates a cautious outlook with potential downward momentum, although the company's diversified strengths in the insurance sector provide resilience. To see Spark's full report on BRK.B stock, click here. More about Berkshire Hathaway B YTD Price Performance: 4.28% Average Trading Volume: 4,706,116 Current Market Cap: $1014.3B Disclaimer & Disclosure Report an Issue
Yahoo
5 days ago
- Business
- Yahoo
Berkshire Hathaway Inc. (BRK-B) Target Edges to $597 at UBS
Berkshire Hathaway Inc. (NYSE:BRK-B) is among the . Brian Meredith, an analyst at UBS Group AG, has raised the price target on Berkshire Hathaway Inc. (NYSE:BRK-B) to $597, up from $595, with an unchanged 'Buy' rating. What the financial service provider highlights is the company's recent operating earnings forecast, surpassing expectations. Meredith notes that the operating earnings of $7,760 for 'A' shares and $5.17 for 'B' shares are 2% higher than UBS's estimates of $7,595 and $5.06 for Class A and Class B, respectively. Although the results posted reflect an earnings drop of 4%, Berkshire Hathaway Inc. (NYSE:BRK-B) is believed to grow and deliver promising results. Skyscrapers with background of graphs and arrows Analysts generally view Berkshire Hathaway Inc. (NYSE:BRK-B) as following the rails of disciplined and opportunistic investment deployment. Many are of the view that the company's core segments, particularly insurance, BNSF, energy, and manufacturing, are currently undervalued. The giant's unique defensive value, combined with its deep liquidity, makes it a case like none other. Berkshire Hathaway Inc. (NYSE:BRK-B) is a Nebraska-based holding company that, together with its subsidiaries, provides insurance, freight rail transportation, and utility services worldwide. Founded in 1998, the company is committed to delivering the right parts on time. While we acknowledge the potential of BRK-B as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the . READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. 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
Yahoo
07-08-2025
- Business
- Yahoo
Are Wall Street Analysts Predicting Berkshire Hathaway Stock Will Climb or Sink?
Valued at a market cap of $1 trillion, Berkshire Hathaway Inc. (BRK.B) owns a diverse range of businesses across sectors, including insurance, energy, railroads, manufacturing, consumer goods, and retail. The Omaha, Nebraska-based company also maintains a substantial equity investment portfolio. This multinational conglomerate has lagged behind the broader market over the past 52 weeks. Shares of BRK.B have gained 11.1% over this time frame, while the broader S&P 500 Index ($SPX) has surged 21.1%. Moreover, on a YTD basis, the stock is up 3.5%, compared to SPX's 7.9% uptick. More News from Barchart Supermicro's Earnings Selloff Explained: Should You Buy SMCI Stock Now? Amazon's $36M Bet on Quantum Computing: What Investors Need to Know AMD Stock Slips After Q2 Earnings, But Here's Why It's a Buying Opportunity Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Narrowing the focus, BRK.B has also underperformed the iShares U.S. Financial Services ETF's (IYG) 32% rise over the past 52 weeks and 10.6% return on a YTD basis. Berkshire Hathaway delivered its Q2 results on Aug. 2, and its shares plunged 2.9% in the following trading session. Due to lower insurance sales and service revenues, the company's top-line fell 1.2% year-over-year to $92.5 billion. Furthermore, its operating earnings declined 3.8% from the year-ago quarter to $11.2 billion, fueled by a 12% drop in insurance underwriting income. For the current fiscal year, ending in December, analysts expect BRK.B's EPS to decline 6.7% year over year to $20.53. The company's earnings surprise history is disappointing. It missed the consensus estimates in three of the last four quarters, while exceeding on another occasion. Among the six analysts covering the stock, the consensus rating is a "Moderate Buy' which is based on two 'Strong Buy,' and four 'Hold' ratings. The configuration has remained consistent over the past three months. On Aug. 4, UBS Group AG (UBS) analyst Brian Meredith maintained a "Buy" rating on BRK.B and raised its price target to $597, the Street-high price target, implying an ambitious 27.3% potential upside from the current levels. The mean price target of $539.25 represents a 15% premium from BRK.B's current price levels. On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
21-07-2025
- Business
- Yahoo
Warren Buffett Warns Inflation is a ‘Gigantic Corporate Tapeworm' That Consumes Investment Capital and Distorts Corporate Earnings
Warren Buffett, the chairman and CEO of Berkshire Hathaway (BRK.B) (BRK.A), has long been known for his ability to distill complex financial realities into clear, memorable guidance for investors. In his 1981 shareholder letter, Buffett used a vivid metaphor to describe the impact of inflation on corporate America, likening it to a 'gigantic corporate tapeworm' that consumes investment capital regardless of a company's health or profitability. His analysis remains relevant for investors and business leaders navigating periods of high inflation and economic uncertainty. Buffett explained that, in an inflationary environment, businesses are forced to allocate ever-increasing amounts of capital just to maintain their existing operations. Even when a company reports profits, those earnings may be illusory if all available cash must be reinvested in receivables, inventory, and fixed assets simply to keep pace with prior-year volumes. As he phrased it, 'Whatever the level of reported profits (even if nil), more dollars for receivables, inventory and fixed assets are continuously required by the business in order to merely match the unit volume of the previous year. The less prosperous the enterprise, the greater the proportion of available sustenance claimed by the tapeworm.' More News from Barchart It's Never 'Happened in the History of Tech to Any Company Before': OpenAI's Sam Altman Says ChatGPT is Growing at an Unprecedented Rate Ditch 'Basic' Nvidia and Buy This 'Unique' Chip Stock Instead Tesla Earnings, Powell Speech and Other Can't Miss Items this Week Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! This perspective is rooted in Buffett's decades of experience as an investor and business owner. Having guided Berkshire Hathaway through multiple economic cycles, Buffett has consistently emphasized the importance of real, inflation-adjusted returns over nominal gains. His warning that 'a business earning 8% or 10% on equity often has no leftovers for expansion, debt reduction or 'real' dividends' highlights the risk that inflation can erode the value of reported profits, leaving little for shareholders after essential reinvestments. Buffett also cautioned investors to be wary of dividend policies that mask a company's inability to generate true surplus cash. He noted that some companies rely on dividend reinvestment plans or issue new shares to fund payouts, effectively robbing Peter to pay Paul. In his words, 'Beware of 'dividends' that can be paid out only if someone promises to replace the capital distributed.' This insight remains pertinent as companies today continue to navigate shareholder expectations for returns amid fluctuating economic conditions. The authority behind Buffett's analysis comes not only from his track record but also from his transparent communication style. His annual letters have become essential reading for investors seeking to understand both the mechanics of business and the broader economic forces at play. The 1981 letter, in particular, stands out for its candid assessment of the challenges posed by inflation and its implications for capital allocation and shareholder value. As inflationary pressures periodically resurface in global markets, Buffett's metaphor of the corporate tapeworm serves as a timeless reminder: real economic progress depends not just on reported profits, but on a business's ability to generate and retain value after accounting for the silent costs of inflation. On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on 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
