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Berkshire Hathaway Flying High After Quarterly Report

The almighty conglomerate, Berkshire Hathaway (NYSE:BRK.A and NYSE:BRK.B), is having a bit of a rally today after they posted Q2 earnings.  After a consensus beating revenue report, with operating earnings up 67%, both Class A and Class B shares are up to highs of +3.5% intraday.

Berkshire Hathaway’s key to success is their powerful and precise picks facilitated by Warren Buffet and Charlie Munger.  Specifically, Berkshire Hathaway wholly owns many well performing corporations such as GEICO and BNSF Railway, both of which attributed greatly to Berkshire’s explosive quarter.  GEICO’s underwriting pre-tax profit soared to $673 million from $119 million.  BNSF profit soared to $1.31 Billion, up 37% from previous.

In addition to GEICO’s and BNSF Railway’s performance, Berkshire Hathaway also nice size stake in Apple (around 5%) which was recently the first company US company to reach a $1 Trillion market cap!

It seems the bulls are with Berkshire Hathaway and the new reports have reconfirmed their predictions.  Sarah DeWitt, a JPMorgan analyst, is one of the bulls aforementioned.  DeWitt states that Berkshire Hathaway’s strengths lie with their “best-in-class management, unmatched balance sheet strength, and many of the companies have strong brands, scale and low-cost competitive advantages.”  CNBC’s recent post mentions that DeWitt has a price target of $235 for Berkshire Hathaway Class B Shares, which she reaffirmed.

Another positive note, Berkshire Hathaway reported ending June with $111.1 billion cash and equivalents.  CNBC also commented that “Buffet could use [the capital] to repurchase stock under a new policy giving him and Munger more freedom to buy back stock they consider undervalued.”

After these positive reports it will be exciting to see what Berkshire Hathaway does as we exit summer and enter into a new quarter.

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