Fair Value Estimate for Berkshire Hathaway
With its 3-star rating, we believe Berkshire's stock is fairly valued compared with our long-term fair value estimate of $467 per Class B share, equivalent to 1.44 times our estimate for its book value per share at the end of 2025 and 1.40 times that estimate for 2026.
A huge cash balance, strategic equity investments, a powerful insurance business, and dozens of other resilient subsidiaries combine to make Berkshire stock attractive. Shares of the conglomerate are already up 34% year to date. The Warren Buffett-led company is well-positioned for any future market sell-offs.
in 1956, and alongside the late Charlie Munger, acquired a textile manufacturing company named Berkshire Hathaway. Today, Berkshire Hathaway (ticker: BRK. A, BRK.B) is a diversified holding company and is the world's most expensive stock, with a single Class A share priced at about $686,000.
Renowned for serving as an investment conduit for Buffett and his long-time business partner Charles Munger, who passed away in November 2023, Berkshire Hathaway is also notable for having the highest-valued stock in the United States—its Class A shares exceeding $500,000 per share in 2023.
Originally a textile manufacturer, the company transitioned into a conglomerate starting in 1965 under the management of chairman and CEO Warren Buffett and vice chairman Charlie Munger (1978–2023). Greg Abel now oversees most of the company's investments and has been named as the successor to Buffett.
Historically, Buffett has argued for keeping large capital on hand to guarantee Berkshire Hathaway's capacity for quick and forceful response when prospects present themselves. From this vantage point, cash is a tool in the investment playbook for both defense and attack.
Berkshire Hathaway Chairman and CEO Warren Buffett has never allowed a stock split of the company's A shares, despite their high trading prices. Buffett believes that splitting the stock would go against his strategy and that the high price tag attracts like-minded investors seeking long-term gains in intrinsic value.
NYSE: BRK.
Berkshire Hathaway differs from other investment firms, like hedge funds. Anyone can invest in Berkshire Hathaway if they have enough money to buy at least one Class B share (more than $450 in late 2024).
Berkshire Hathaway Inc.'s (NYSE:BRK-B) competitive edge lies in its diversified business model and strong financial record, making it one of the safest stocks to buy according to analysts. According to Insider Monkey's database, 120 hedge funds held stakes in Berkshire Hathaway Inc. (NYSE:BRK-B), as of Q3 2024.
Class A shares offer a long-term investment but little chance of a stock split down the line. Investors looking for flexibility might prefer to invest in Berkshire's Class B shares. They can add to their stake or trim it from time to time without dealing in the six-figure numbers that a single Class A share represents.
Despite being a large, mature, and stable company, Berkshire Hathaway does not pay dividends to its investors. Instead, the company chooses to reinvest retained earnings into new projects, investments, and acquisitions.
Berkshire Hathaway is a holding company run by Warren Buffett that owns a diverse range of private businesses and significant minority interests in public companies such as Apple. It has a market capitalization of over $715 billion and is the sixth-largest public company in the world.
That might explain why the Bill & Melinda Gates Foundation has Berkshire as its second biggest holding, behind only Microsoft. As of the latest reporting period, the foundation owns 24.6 million shares of Berkshire worth around $10 billion, making up 21% of its total portfolio.
Top Warren Buffett Stocks
Bank of America (BAC), 766.3 million. Coca-Cola (KO), 400 million. Kraft Heinz (KHC), 325.6 million. Apple (AAPL), 300 million.
Warren Buffett has given away more than half of his stock in Berkshire Hathaway under a philanthropic program initiated in 2006, but his control of the company is as airtight as ever. The reason is that most of the ownership of Berkshire has migrated to lower-vote Class B shares since their creation in 1996.
In interviews previously, Warren Buffett has stated that he favors 3-month and 6-month Treasury bills as the place to park cash. These have been yielding as much as 5.40% in recent months but for simple math and to be conservative assume Berkshire is earning 5% annually.
As a value investor, Buffett often looks for troubled companies, buys up their stock, and turns them around. Berkshire Hathaway likes to invest in companies that have a long history of paying dividends. Buffett's strategy is to reinvest those dividends but not to pay one to Berkshire Hathaway investors.
Almost half of the total portfolio
It owns nearly 790 million shares of Apple stock, or a 5.1% stake in the company.