Berkshire Hathaway, the conglomerate led by Warren Buffett, saw its share increase in value as it rose on Monday after posting strong earnings for the fourth quarter this weekend. Both Class A and B shares rose by 1.5% each.
Class A saw a 17% increase over the last year, while Class B gained more than 18%. According to FactSet, Berkshire saw its value rise by $930.1 billion, up from $905.5 billion at closing on Friday.
Berkshire posted fourth-quarter operating earnings of $8.481 billion on Saturday, approximately 28% higher than its $6.625 billion valuation from the same period a year ago. This increase is believed to be powered by gains in its insurance business. Profits from insurance, railroads, and utilities are being reported as operating earnings.
Berkshire purchased insurer Alleghany for $11.6 billion in 2022.
The conglomerate's cash levels also rose to record numbers. Berkshire saw cash levels of $167.6 billion in cash in the fourth quarter, surpassing the $157.2 billion record held in the prior quarter.
Still, one analyst said he expects the stock is fairly valued, saying any upside from the conglomerate's rosy earnings outlook is already priced into the stock.
"BRK shares have significantly outperformed financial services peers during 2023, supported by a relatively strong earnings outlook. We continue to expect solid earnings from BRK's diverse group of operating companies," Edward Jones' James Shanahan wrote on Saturday. "In our view, however, the current share price reflects these positives."
Investors who are observing these gains should not expect Buffett's comments to help Berkshire reach $1 trillion any faster. Buffett has said that Berkshire would only slightly outperform the average company moving forward as Berkshire reaches a net worth equaling 6% of the total S&P 500 companies.
'With our present mix of businesses, Berkshire should do a bit better than the average American corporation and, more importantly, should also operate with materially less risk of permanent loss of capital," Buffett said. "Anything beyond 'slightly better,' though, is wishful thinking."
Buffett added that only a handful of businesses are likely to "truly move the needle" for the firm through acquisitions.
