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Zacks Investment Ideas feature highlights: Alleghany and Berkshire Hathaway
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For Immediate Release
Chicago, IL – March 22, 2022 – Today, Zacks Investment Ideas feature highlights Alleghany , and Berkshire Hathaway Inc. (BRK.B - Free Report) .
Is Berkshire Hathaway a Buy After Alleghany Acquisition?
Berkshire Hathaway rose over 2% this morning on news of its agreement to acquire insurer Alleghany in a blockbuster deal valued at $11.6 billion. Billionaire Warren Buffett's crown jewel, Berkshire stated the company is paying $848.02/share in cash – a more than 25% premium to Alleghany's closing price last week.
The agreement is expected to close later this year during the fourth quarter. Alleghany shares surged more than 25% on the announcement.
The deal strengthens Berkshire's insurance arm that already includes the likes of Geico and reinsurance giant Gen Re. Y, which is often referenced as a mini-Berkshire, experienced a similar journey from a mainly railroad holding firm to an insurance and investment company. Alleghany now primarily provides property and casualty reinsurance and insurance products globally.
From my perspective, this appears to be another potentially lucrative deal in a long list of substantial acquisitions. Berkshire's purchase reunites Buffett with Alleghany CEO Joseph Brandon, who originally led Berkshire's Gen Re unit from 2001 to 2008. Buffett knows exactly what he's getting and believes Berkshire will be the "perfect permanent home" for Alleghany.
BRK.B shares had already been outperforming this year, and it appears investors are viewing the details of the Y purchase favorably as the stock hit an all-time high today. Berkshire Hathaway is part of the Zacks Insurance – Property and Casualty industry group, which currently ranks in the top 26% of approximately 250 industries.
Investing in stocks contained within leading industry groups can provide a constant 'tailwind' and increase the odds of success.
Let's take a closer look at Berkshire's investment picture.
Berkshire Hathaway Inc.
Berkshire Hathaway is a holding company for a multitude of businesses. The company is primarily engaged in the insurance, freight rail transportation, and utility businesses
globally. BRK.B also generates, stores, and distributes electricity from a host of energy sources such as natural gas, nuclear, and geothermal. An investment group led by Buffett took full control of BRK.B in 1965. Berkshire Hathaway is famously headquartered in Omaha, NE.
The atypical conglomerate is well-known for its humble beginnings and has now grown to more than 90 subsidiaries engaged in business ranging from chocolates and ice cream to property and casualty insurance. BRK.B maintains a strong capital position and substantial cash holdings, which were slightly reduced due to the recent Alleghany acquisition. Berkshire buys back stock regularly with $27.1 billion worth of shares repurchased last year.
BRK.B has surpassed earnings estimates in three of the past four quarters. The company most recently posted Q4 EPS of $3.27, a +17.2% surprise over the $2.79 consensus estimate. BRK.B has delivered a trailing four-quarter average earnings surprise of +11.86%, helping the stock advance nearly 40% in the past year.
Analysts covering BRK.B have increased their full-year EPS estimates by 2.31% in the past 30 days. The 2022 Zacks Consensus EPS Estimate is now $12.86, reflecting potential growth of 6.11% relative to last year.
BRK.B is ranked a Zacks #2 (Buy) and looks to continue its outperformance. Make sure to put it on your watchlist if you haven't already.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Alleghany and Berkshire Hathaway
For Immediate Release
Chicago, IL – March 22, 2022 – Today, Zacks Investment Ideas feature highlights Alleghany , and Berkshire Hathaway Inc. (BRK.B - Free Report) .
Is Berkshire Hathaway a Buy After Alleghany Acquisition?
Berkshire Hathaway rose over 2% this morning on news of its agreement to acquire insurer Alleghany in a blockbuster deal valued at $11.6 billion. Billionaire Warren Buffett's crown jewel, Berkshire stated the company is paying $848.02/share in cash – a more than 25% premium to Alleghany's closing price last week.
The agreement is expected to close later this year during the fourth quarter. Alleghany shares surged more than 25% on the announcement.
The deal strengthens Berkshire's insurance arm that already includes the likes of Geico and reinsurance giant Gen Re. Y, which is often referenced as a mini-Berkshire, experienced a similar journey from a mainly railroad holding firm to an insurance and investment company. Alleghany now primarily provides property and casualty reinsurance and insurance products globally.
From my perspective, this appears to be another potentially lucrative deal in a long list of substantial acquisitions. Berkshire's purchase reunites Buffett with Alleghany CEO Joseph Brandon, who originally led Berkshire's Gen Re unit from 2001 to 2008. Buffett knows exactly what he's getting and believes Berkshire will be the "perfect permanent home" for Alleghany.
BRK.B shares had already been outperforming this year, and it appears investors are viewing the details of the Y purchase favorably as the stock hit an all-time high today. Berkshire Hathaway is part of the Zacks Insurance – Property and Casualty industry group, which currently ranks in the top 26% of approximately 250 industries.
Investing in stocks contained within leading industry groups can provide a constant 'tailwind' and increase the odds of success.
Let's take a closer look at Berkshire's investment picture.
Berkshire Hathaway Inc.
Berkshire Hathaway is a holding company for a multitude of businesses. The company is primarily engaged in the insurance, freight rail transportation, and utility businesses
globally. BRK.B also generates, stores, and distributes electricity from a host of energy sources such as natural gas, nuclear, and geothermal. An investment group led by Buffett took full control of BRK.B in 1965. Berkshire Hathaway is famously headquartered in Omaha, NE.
The atypical conglomerate is well-known for its humble beginnings and has now grown to more than 90 subsidiaries engaged in business ranging from chocolates and ice cream to property and casualty insurance. BRK.B maintains a strong capital position and substantial cash holdings, which were slightly reduced due to the recent Alleghany acquisition. Berkshire buys back stock regularly with $27.1 billion worth of shares repurchased last year.
BRK.B has surpassed earnings estimates in three of the past four quarters. The company most recently posted Q4 EPS of $3.27, a +17.2% surprise over the $2.79 consensus estimate. BRK.B has delivered a trailing four-quarter average earnings surprise of +11.86%, helping the stock advance nearly 40% in the past year.
Analysts covering BRK.B have increased their full-year EPS estimates by 2.31% in the past 30 days. The 2022 Zacks Consensus EPS Estimate is now $12.86, reflecting potential growth of 6.11% relative to last year.
BRK.B is ranked a Zacks #2 (Buy) and looks to continue its outperformance. Make sure to put it on your watchlist if you haven't already.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.