Berkshire: Strong Results, Massive Cash Hoard

(11min)

Summary

  • Berkshire Hathaway reported strong Q4 profitability, with operating earnings up 70% year-over-year, driven mainly by its insurance business.
  • The company's cash hoard reached an all-time high, raising questions about potential major acquisitions or other uses for the cash.
  • Despite solid performance, Berkshire Hathaway's current valuation is high, making it less attractive for investment at this time.
  • With limited share repurchases and a high price-to-book ratio, waiting for a lower valuation could be more beneficial for investors.
  • Looking for a helping hand in the market? Members of Cash Flow Club get exclusive ideas and guidance to navigate any climate. Learn More »

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Article Thesis

Berkshire Hathaway Inc. (BRK.A)(BRK.B) reported its most recent earnings results on Saturday, showcasing strong profitability. The company's cash hoard hit a new all-time high, which brings up the question of what Berkshire Hathaway will do with

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This article was written by

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Jonathan Weber holds an engineering degree and has been active in the stock market and as a freelance analyst for many years. He has been sharing his research on Seeking Alpha since 2014. Jonathan’s primary focus is on value and income stocks but he covers growth occasionally.

He is a contributing author for the investing group Cash Flow Club where along with Darren McCammon, they focus on company cash flows and their access to capital. Core features include: access to the leader’s personal income portfolio targeting 6%+ yield, community chat, the “Best Opportunities” List, coverage of energy midstream, commercial mREITs, BDCs, and shipping sectors,, and transparency on performance. Learn More.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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