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Berkshire Hathaway Inc. (BRK.B) Gains But Lags Market: What You Should Know

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In the latest trading session, Berkshire Hathaway Inc. (BRK.B - Free Report) closed at $221.33, marking a +1.29% move from the previous day. This change lagged the S&P 500's 2.12% gain on the day. Elsewhere, the Dow gained 2.13%, while the tech-heavy Nasdaq added 2.64%.

Coming into today, shares of the company had lost 2.35% in the past month. In that same time, the Finance sector lost 2.62%, while the S&P 500 lost 4.4%.

Investors will be hoping for strength from BRK.B as it approaches its next earnings release, which is expected to be February 22, 2019. The company is expected to report EPS of $2.43, up 80% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.97 per share and revenue of $262 billion, which would represent changes of +70.14% and +8.2%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for BRK.B. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.87% higher. BRK.B is currently a Zacks Rank #1 (Strong Buy).

In terms of valuation, BRK.B is currently trading at a Forward P/E ratio of 21.92. Its industry sports an average Forward P/E of 15, so we one might conclude that BRK.B is trading at a premium comparatively.

Investors should also note that BRK.B has a PEG ratio of 3.13 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BRK.B's industry had an average PEG ratio of 1.27 as of yesterday's close.

The Insurance - Property and Casualty industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 186, which puts it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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