No. of Recommendations: 2
Consider responding to a VL promo, like many did with Barrons. " Berkshire Hathaway will likely report
strong earnings for full-year 2023.
(The company was scheduled to announce
results shortly after we went to press with
this Issue.) We believe that last year was a
very strong one for the company, as most
of its segments performed well. Furthermore, healthy equity markets contributed
substantially to the bottom line for the
year. While it was a difficult year for the
insurance market, reflecting severe
weather-related events, we believe that
Berkshire’s insurance unit made it
through in decent shape. Also, increased
investment income was probably a significant positive factor. This line item was
aided by several interest-rate increases by
the Federal Reserve in response to the
highest inflation readings since the early
1980s. While Berkshire does delve into
other asset categories more than most
plain-vanilla insurers, it does have a significant fixed-income component to its
portfolio.
The company’s earnings will likely
take a step back this year, before
regaining traction in 2025, though we
feel this requires an explanation.
Despite the aforementioned abnormally
high catastrophe levels in the insurance
segment, the company has benefited from
strong performances across most of its
product lines and its investment portfolio.
This may well make for a difficult comparisons as 2024 continues. Nevertheless,
this year’s results ought to be quite
healthy on an absolute basis.
The company’s well-diversified status
ought to help orchestrate earnings
growth over the long run. The diversification is especially handy when a particular division lags behind and underperforms..
These shares have outperformed the
Value Line Arithmetic Index over the
trailing three- and five-year periods.
That said, they don’t stand out from the
crowd at recent levels. They are merely
ranked to keep pace with the broadermarket averages in the year ahead, while
3- to 5-year gains potential is nothing to
write home about. Acquisitions, which
aren’t included in our projections until
they are finalized, could add meaningfully
to our outlook, though.
Alan G. House March 1, 2024" Timeliness remains 3- safety remains 1- technical drops to 4.
