The rise in the stock was propelled by the recent announcement of Duracell acquisition and strong third-quarter earnings which outpaced the Zacks Consensus Estimate by 12.4%. About 3.3 million shares exchanged hands in the last session.
Growth Drivers
Berkshire Hathaway’s strong third-quarter financial performance marked a continuation of superior results, and attractive revenue and earnings growth.
Berkshire Hathaway’s third-quarter 2014 operating earnings of $1.91 per share came way ahead of the Zacks Consensus Estimate of $1.70. Earnings also compared favorably with $1.49 per share reported in the year-ago quarter.
Earnings growth was primarily driven by the insurance business which benefited from higher underwriting income on the absence of catastrophic claims and also from the energy business, which benefited from last year’s acquisition of NV Energy in Nevada. Other segments at Manufacturing, Service and Retailing and Finance and Financial products also contributed to earnings growth, albeit to a lesser degree.
Total revenue came in at $51.2 billion, up 15.2% year over year. The increase was attributable to broad-based growth across all the operating segments, with insurance being the greatest contributor.
Last month, Warren Buffett, the CEO of the company, announced his plans of buying the battery unit Duracell from Procter & Gamble Co. (PG).
The deal, valued at $4.7 billion, will see a stock swap wherein the equity investments of Buffett in the stock of P&G will be exchanged for one of its operating business.
Given Warren Buffett’s close association with Berkshire Hathaway, investors remain interested in the stock. He has created tremendous value for its shareholders over the past several years. A strong capital position, along with his unique skills in making the right acquisitions, has made Berkshire Hathaway a conglomerate with more than 80 businesses and equity stake in various big companies.
Estimate Revision Shows Strength
Driven by optimism surrounding the stock, the Zacks Consensus Estimate for 2014 earnings per share climbed 1.8% to $7.28 over the last 30 days.
Berkshire Hathaway currently carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Other players worth considering include Arch Capital Group Ltd. (ACGL), AmTrust Financial Services, Inc. (AFSI) and Navigators Group Inc. (NAVG). All these stocks sport a Zacks Rank #1 (Strong Buy).
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