How much a stock’s price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you’d invested in Berkshire Hathaway B (BRK.B) ten years ago? It may not have been easy to hold on to BRK.B for all that time, but if you did, how much would your investment be worth today?
Berkshire Hathaway B’s Business In-Depth
With that in mind, let’s take a look at Berkshire Hathaway B’s main business drivers.
Founded in 1889, Berkshire Hathaway is an Omaha, NE-based holding company, which owns more than 90 subsidiaries in insurance, rail roads, utilities, manufacturing services, retail and home building.
The most important of these are insurance businesses conducted on both a primary basis and insurance basis, a freight rail transportation business and a group of utility and energy generation and distribution businesses.
It has four major operating sectors – The Insurance group (53% of 2021 Revenues) includes : GEICO, Government Employees Insurance Company writes private passenger automobile insurance; General Re conducts reinsurance business, offering property and casualty, life and health coverage to clients worldwide; Berkshire Hathaway Reinsurance Group underwrites excess-of-loss reinsurance and quota-share coverage for insurers and reinsurers globally; Berkshire Hathaway Primary Group comprises a wide variety of independently-managed insurance businesses that principally write liability coverage for commercial accounts.
The Regulated Utility Business (11%) includes MidAmerican and BNSF operations, which provides railway services through Burlington Northern Santa Fe Corp.
The Manufacturing, Service & Retailing Operations (36%) includes: Manufacturing – Acme Building Brands, Benjamin Moore, H.H. Brown Shoe Group, CTB, Fechheimer Brothers, Forest River, Fruit of the Loom, Garan, ISCAR, Johns Manville, Justin Brands, Larson-Juhl, MiTek, Russell, Scott Fetzer, Vanity Fair, Richline Group and Albecca. The Service sub-segment includes – Buffalo News, Business Wire, FlightSafety, International Dairy Queen, Pampered Chef, and NetJets. Retailing sub-segment includes – Ben Fridge Jeweler, Borsheim’s, Helzberg Diamond Shops, Jordan’s Furniture, Nebraska Furniture Mart, See’s Candies, Star Furniture, R.C. Willey and TTI Inc. Others include – Marmon Group, McLane Company and Shaw Industries.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Berkshire Hathaway B, if you bought shares a decade ago, you’re likely feeling really good about your investment today.
A $1000 investment made in April 2012 would be worth $4,364.11, or a gain of 336.41%, as of April 11, 2022, according to our calculations. This return excludes dividends but includes price appreciation.
The S&P 500 rose 221.03% and the price of gold increased 12.67% over the same time frame in comparison.
Looking ahead, analysts are expecting more upside for BRK.B.
Shares of Berkshire have outperformed the industry in a year. The company is one of the largest property and casualty insurance companies measured by premium volume. Berkshire’s inorganic growth story remains impressive with strategic acquisitions. A strong cash position supports earnings-accretive bolt-on buyouts and indicates the company’s financial flexibility. Continued insurance business growth fuels increase in float, drive earnings and generates maximum return on equity. The non-insurance businesses are delivering improved results with increased revenues over the past few years. A sturdy capital level provides further impetus. However, exposure to catastrophe loss induces earnings volatility and also affects the property and casualty underwriting results of Berkshire. Huge capital expenditure remains a headwind for the company.
The stock is up 8.11% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2022. The consensus estimate has moved up as well.
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Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
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