How Much Momentum Does Berkshire Hathaway Inc. (BRK.B) Have Left?

Well-known investor Warren Buffett’s diversified holding company Berkshire Hathaway Inc. (BRK.B – Get Rating) reported impressive results for the first quarter of 2023. While BRK.B has a solid financial position, its subsidiary, PacifiCorp, faces legal issues. Given its highly elevated valuation and uncertain economic conditions, it could be wise to wait for a better entry point in this stock.

BRK.B is a massive holding company run by renowned investor Warren Buffett since the mid-1960s. The company provides property and casualty insurance and reinsurance, utilities and energy, finance, freight rail transportation, manufacturing, retailing, and services.

Warren Buffett’s BRK.B operates through the following segments: GEICO; Berkshire Hathaway Reinsurance Group; Berkshire Hathaway Primary Group; Burlington Northern Santa Fe, LLC (BNSF); McLane Company; Manufacturing; and Service and Retailing.

For the first quarter of fiscal 2023, revenue and earnings for BRK.B jumped significantly, driven by a rebound in the conglomerate’s insurance business. The company’s insurance underwriting business saw a sharp increase, from earnings of $167 million in the first quarter of 2022 to $911 million now. Also, insurance investment income grew 68% year-over-year to $1.17 billion.

In addition, GEICO witnessed a major turnaround during the quarter, returning to an underwriting profit of $703 million. Last year, the auto insurer incurred a $1.90 billion pretax underwriting loss as it lost market share to rival Progressive. BRK.B’s cash hoard also climbed to $130.62 billion from $128 billion in the prior year’s quarter.

Furthermore, the holding company repurchased $4.40 billion worth of stock, the most since the first quarter of 2021, an increase from $2.80 billion at the end of last year.

While the fiscal 2023 first-quarter results indicate the company’s strong financial position, the verdict in the Oregon wildfires case came against its subsidiary, PacifiCorp, an electric utility with service territory throughout Oregon, northern California, and southeastern Washington.

On June 14…

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