Berkshire is below Meta and above Eli Lilly in the market cap top 10, which is dominated by high-flying tech stocks that have surged in recent years.
CFRA Research analyst Cathy Seifert tells CNBC.com Berkshire’s $1 trillion valuation is “significant at a time when Berkshire represents one of the few remaining conglomerates in existence today.”
It is also, by far, the oldest U.S. company in the trillion-dollar club.
“Berkshire has done it the slower, but more sure, way,” says Steve Check of Check Capital Management on Bloomberg.com. “It’s harder to make money the old-fashioned way.”
In 1965, Buffett, in a fit of pique (it was a $200 billion mistake, he told us in 2010), took control of what was a failing Massachusetts textile mill.
Since then, Berkshire Hathaway’s share price had a 19.8% compounded annual gain through the end of last year, compared to 10.2% for the S&P.
He credits “a well-thought-out strategy prosecuted for seven decades with discipline, consistency and unusual insight. Discipline and consistency are essential, but not sufficient. Without the unusual insight, he clearly wouldn’t be the greatest investor in history.”
Seven straight record highs
Berkshire’s entrance to the trillion-dollar club this week is, of course, due to strong gains for its stock.
The Class A and Class B shares have closed at fresh all-time record highs for seven straight sessions and are up 32-33% this year.
CNBC.com’s Yun Li writes it isn’t clear exactly what’s propelling Berkshire’s stock, “Whether it’s a bet on the American economy and Buffett’s sprawling group of businesses poised to benefit if it keeps chugging along or whether they see Berkshire as a [$277 billion as of June 30] cash fortress that will generate steady income in the face of an uncertain macro environment.”
BofA stock sales now total more than $6 billion
Berkshire has added around $6 billion to that cash pile with a string of Bank of America stock sales since mid-July.
According to a new filing tonight, sales of 21.1 million shares on Wednesday, yesterday, and today generated $848.2 million, which is an average price of $40.24.
Berkshire has sold BAC shares for six straight sessions. Since it began to reduce its holding on July 17, it has sold shares during 21 of the past 33 sessions.
In total, Berkshire has cut its BofA holding by 14.5% with the sale of 150.1 million shares for $6.2 billion. That’s an average of $41.33 per share.
