We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Berkshire Hathaway Eyes Growth Despite Cat Loss Concerns
Read MoreHide Full Article
On Sep 29, 2016, we issued an updated research report on Berkshire Hathaway Inc. (BRK.B - Free Report) .
Berkshire Hathaway’s non-insurance businesses like utilities and & energy, and manufacturing, service & retail, have been reporting favorable results. In fact, total revenue from manufacturing, service and retail has improved substantially over the past several quarters. The strong results across most of the units can be attributed to better economic conditions and higher consumer demand.
Also, the company’s book value has been improving consistently. The insurer’s already robust book value growth is expected to be boosted further with the turn of the economy, increased gains from the value of the derivatives positions, and continued positive contribution from earnings growth in insurance operations.
Further the company’s inorganic portfolio continues to impress and is anticipated to be accretive to earnings in the future. Recently, the property and casualty (P&C) insurer announced its intention to buy stake in Apple Inc. (AAPL - Free Report) . We expect this strategic move to be accretive to bottom-line growth going forward.
Moreover, a robust capital level not only reflects financial strength but also well positions the company to negotiate strongly when dealing with reinsurance activities.
However, exposure to catastrophe losses continues to adversely affect the company’s underwriting results. Given the unpredictable nature and magnitude of catastrophes, such losses will continue to produce significant volatility in the insurer’s P&C underwriting results. In addition, huge capital expenditure on account of the company’s railroad operations raises concern.
The Zacks Consensus Estimate has also been witnessing downward estimate revisions for 2016 and 2017, over the last 60 days.
Stocks to Consider
Investors may consider some other stocks from the P&C industry, which will include National Interstate Corporation (NATL - Free Report) and Argo Group International Holdings, Ltd. .
National Interstate, a specialty P&C insurer, has delivered positive surprises in two of the last four quarters, with an average beat of 7.59%.
Argo Group, another P&C insurer, has delivered positive surprises in all of the last four quarters, with an average beat of 21.73%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Berkshire Hathaway Eyes Growth Despite Cat Loss Concerns
On Sep 29, 2016, we issued an updated research report on Berkshire Hathaway Inc. (BRK.B - Free Report) .
Berkshire Hathaway’s non-insurance businesses like utilities and & energy, and manufacturing, service & retail, have been reporting favorable results. In fact, total revenue from manufacturing, service and retail has improved substantially over the past several quarters. The strong results across most of the units can be attributed to better economic conditions and higher consumer demand.
Also, the company’s book value has been improving consistently. The insurer’s already robust book value growth is expected to be boosted further with the turn of the economy, increased gains from the value of the derivatives positions, and continued positive contribution from earnings growth in insurance operations.
Further the company’s inorganic portfolio continues to impress and is anticipated to be accretive to earnings in the future. Recently, the property and casualty (P&C) insurer announced its intention to buy stake in Apple Inc. (AAPL - Free Report) . We expect this strategic move to be accretive to bottom-line growth going forward.
Moreover, a robust capital level not only reflects financial strength but also well positions the company to negotiate strongly when dealing with reinsurance activities.
However, exposure to catastrophe losses continues to adversely affect the company’s underwriting results. Given the unpredictable nature and magnitude of catastrophes, such losses will continue to produce significant volatility in the insurer’s P&C underwriting results. In addition, huge capital expenditure on account of the company’s railroad operations raises concern.
The Zacks Consensus Estimate has also been witnessing downward estimate revisions for 2016 and 2017, over the last 60 days.
Stocks to Consider
Investors may consider some other stocks from the P&C industry, which will include National Interstate Corporation (NATL - Free Report) and Argo Group International Holdings, Ltd. .
National Interstate, a specialty P&C insurer, has delivered positive surprises in two of the last four quarters, with an average beat of 7.59%.
Argo Group, another P&C insurer, has delivered positive surprises in all of the last four quarters, with an average beat of 21.73%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>