Berkshire Hathaway Inc. BRK.B recently made an investment in JP Morgan Chase (NYSE:JPM) and Oracle (NYSE:ORCL) while dropping Walmart (NYSE:WMT) from its portfolio per sources.
Reportedly, the insurer purchased 36 million shares of JP Morgan Chase, 41.4 million shares of Oracle and sold 1.4 million Walmart shares.
Berkshire Hathaway boasts an impressive growth story with stakes in Apple (NASDAQ:AAPL), in the four biggest U.S. airlines, Precision Castparts, Kraft Heinz (NASDAQ:KHC) Co., pipeline operator Kinder Morgan (NYSE:KMI), Visa (NYSE:V) and Bank of New York Mellon (NYSE:BK) among others.
With a huge cash pile, the Zacks Rank #1 (Strong Buy) insurer has been eyeing strategic buyouts. While big acquisitions open new business opportunities, bolt-on acquisitions enhance earnings of the existing business and reflect the company’s solid capital position. In August, Berkshire Hathaway bought a stake worth $356 million in Paytm’s parent One97 Communications in a bid to penetrate into financial payments sector in India. Paytm operates as India's largest digital wallet.
Berkshire Hathaway — a conglomerate with more than 90 subsidiaries — engages in businesses ranging from ice-cream to insurance. Though the company runs heterogeneous businesses, its property and casualty insurance business generates maximum return on equity. The company is leaving no stone unturned to capitalize on growth opportunities banking on huge cash float. It exited the second quarter with float of $118 billion, reflecting a consistent increase in premium volumes.
Warren Buffett, who spearheads Berkshire Hathaway, has always eyed strategic investments, holding great promises for smart returns. His unique skills have created tremendous value for shareholders over the past 53 years.
Shares of Berkshire Hathaway have outperformed the industry in a year. While the stock has gained 18.7%, the industry has increased 13%. The company should continue to benefit from its growing Insurance, Manufacturing, Service and Retailing plus Finance and Financial Products segments amid an improving economy.
Acquisitions by Other Insurers
Considering the insurance industry’s all-time high available capital resource, acquisitions are on the rise. Recently, Brown & Brown of Massachusetts, LLC, a unit of Brown & Brown, Inc. (NYSE:BRO) purchased the assets of Rodman Insurance Agency while Arthur J. Gallagher & Co. (NYSE:AJG) acquired Meridian One Corporation. Marsh & McLennan Companies, Inc.’s (NYSE:MMC) middle market agency subsidiary, Marsh & McLennan Agency LLC acquired Eustis Insurance & Benefits to expand in Louisiana.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Brown & Brown, Inc. (BRO): Free Stock Analysis Report
Arthur J. Gallagher & Co. (AJG): Free Stock Analysis Report
Marsh & McLennan Companies, Inc. (MMC): Free Stock Analysis Report
Berkshire Hathaway Inc. (NYSE:BRKa) (BRK.B): Free Stock Analysis Report
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