Company Reports

Wide-moat-rated Berkshire Hathaway reported a relatively quiet first quarter for its equity investment portfolio, with net sales coming in at an estimated $17.3 billion based on the insurer's most recent 13F and 10-Q filings.

While wide-moat Berkshire Hathaway's annual meeting has always been entertaining, it generally has not been a huge source of insight into the firm's operations. While this year's event had the feel of past meetings—the setting was the same, the throngs of shareholders were present, and the company's top managers were onstage taking questions from CNBC's Becky Quick and shareholders during the live event in Omaha—the absence of Charlie Munger (who passed away in November 2023) hung over the meeting, with his quick wit and biting comments sorely missed by all in attendance.

As we dig into wide-moat Berkshire Hathaway's first-quarter results, we expect to leave our $640,000 per Class A share and $427 per Class B fair value estimate in place. Operating subsidiary top-line growth of 5.2% (which excludes the impact of investment and derivative gains/losses) was at the top end of our expectations for 3%-5% revenue growth year over year. All the difference was due to a higher revenue contribution from Pilot Travel Centers than we were projecting, more than making up for Berkshire Hathaway Energy's top-line growth falling short of our expectations.

Wide-moat Berkshire Hathaway reported adjusted first-quarter results that were about in line with our expectations. We are leaving in place our fair value estimates of $640,000 per Class A share and $427 per Class B share in place. First-quarter reported revenue, which includes unrealized and realized gains/losses from Berkshire's investments and derivatives portfolios, declined 23.6% year over year to $91.7 billion, as the company lapped significant unrealized and realized investment gains during the first quarter of 2023. Excluding the impact of these investment and derivative gains/losses and other adjustments, first-quarter operating revenue increased 5.2% to $89.9 billion.

For wide-moat Berkshire Hathaway's annual meeting this weekend, we've put together a list of 10 questions we would directly ask management if we could. At this year's event, Warren Buffett, Ajit Jain, and Greg Abel will take questions (forwarded on by shareholders and other interested participants) directly from CNBCs Becky Quick, as well as from shareholders in attendance at the live event in Omaha, Nebraska. Although the analyst panel has been set aside, we continue to believe it served as an effective means of eliciting details about Berkshire's operations. As the firm moves closer to the day when Buffett is no longer running the show, we continue to think that Berkshire should face tough questions about its operations, capital allocation priorities, and succession planning.

We continue to believe that Berkshire, owing to its diversification and its lower overall risk profile, offers one of the better risk-adjusted return profiles in the financial-services sector (and remains a generally solid candidate for downside protection during market selloffs). We remain impressed by Berkshire's ability in most years to generate high-single- to double-digit growth in book value per share, comfortably above our estimate of its cost of capital.

Wide-moat Berkshire Hathaway reported fourth-quarter results that were slightly better than our expectations. We expect to increase our Class A $600,000 and Class B $400 per-share fair value estimates once we have incorporated the results into our valuation models.

Wide-moat-rated Berkshire Hathaway reported a quieter fourth quarter for its equity investment portfolio, with net sales, exclusive of purchases, coming in at an estimated $1.8 billion based on the insurer's recent 13F filing.

We knew Berkshire Hathaway Vice Chairman Charlie Munger's passing was imminent, as he was nearly 100 years old and not in the best of health the past few years. It is certainly a spiritual loss for Berkshire Hathaway and for Munger's investing partner of the past 60-plus years, Chairman and CEO Warren Buffett. In accordance with contemporary corporate operations, we don't expect the event to have too significant of an impact on Berkshire's wide economic moat or our $600,000 ($400) per Class A (B) share fair value estimate.

Wide-moat-rated Berkshire Hathaway reported a relatively busy third quarter for its equity investment portfolio, with net sales (exclusive of purchases) coming in at an estimated $5.7 billion based on the insurer's recent 13F filing.

With wide-moat Berkshire Hathaway reporting third-quarter results that were in line with our expectations, we expect to leave our $600,000 ($400) per Class A (B) share fair value estimate in place.

We continue to believe that Berkshire, owing to its diversification and its lower overall risk profile, offers one of the better risk-adjusted return profiles in the financial-services sector (and remains a generally solid candidate for downside protection during market selloffs). We remain impressed by Berkshire's ability in most years to generate high-single- to double-digit growth in book value per share, comfortably above our estimate of its cost of capital. We also believe it will take some time before the firm finally succumbs to the impediments created by the sheer size and scale of its operations, and that the ultimate departure of Warren Buffett and Charles Munger will have less of an impact on future operating results than many investors believe. We view Berkshire's decentralized business model, broad business diversification, high cash-generation capabilities, and unmatched balance sheet strength as true differentiators for the firm.

Wide-moat-rated Berkshire Hathaway reported a relatively busy second quarter for its equity investment portfolio, with net sales (exclusive of purchases) coming in at an estimated $5.1 billion based on the insurer's recent 13F filing.

With wide-moat Berkshire Hathaway reporting second-quarter results that were in line with our expectations, we expect to leave our $555,000 ($370) per Class A (B) share fair value estimate in place.

We see no reason to alter our fair value estimate for wide-moat-rated Berkshire Hathaway following news that the company has agreed to acquire narrow-moat Dominion Energy's 50% stake in Cove Point, a U.S.-based export, import, and storage facility for liquefied natural gas. For those who may not recall, the insurer's utilities and energy segment, Berkshire Hathaway Energy, acquired nearly all of Dominion's natural gas transmission and storage operations for around $4.0 billion ($9.6 billion when including assumed debt) in July 2020. That deal included BHE's assumption of a 25% economic stake in Cove Point, with Dominion retaining its 50% stake and the other 25% held by Brookfield Infrastructure Partners.

Having had a chance to sift through the changes in wide-moat-rated Berkshire Hathaway's first-quarter 13F filing now that the company has segregated its holdings at New England Asset Management (a wholly owned subsidiary of the firm's General Re insurance subsidiary) from those that will continue to be managed as separate client holdings (amounting to $645 million at the end of March 2023), we are updating our comments about the company's equity investment portfolio for the most recent quarter.

Wide-moat-rated Berkshire Hathaway reported a relatively busy first quarter for its equity investment portfolio, with net sales (exclusive of purchases) coming in at an estimated $10.4 billion based on the insurer's 13-F filing (as well as a similar filing for New England Asset Management, a wholly-owned subsidiary of the firm's Gen Re insurance subsidiary).

While wide-moat Berkshire Hathaway's annual meeting has always been entertaining, it has generally not been a huge source of meaningful insight into the firm's operations. This year's event had the feel of past meetings, with Warren Buffett and Charlie Munger joined by Ajit Jain and Greg Abel on stage taking questions from CNBC's Becky Quick and shareholders during a live event in Omaha.

Having dug deeper into wide-moat Berkshire Hathaway's first-quarter results, we expect to leave our $555,000 ($370) per Class A (B) share fair value estimate in place. Operating subsidiary top-line growth of 20.5% (which excludes the impact of investment and derivative gains/losses and other adjustments), was in line with our expectations, which had envisioned the contributions from both Alleghany's operations (folded in during the fourth quarter of 2022) and the onboarding of Pilot Travel Centers (at the end of January 2023).

With wide-moat Berkshire Hathaway's annual meeting taking place this weekend, we've put together a list of 10 questions we'd like to ask management if we could do so directly. At this year's event, CEO Warren Buffett, Charlie Munger, Ajit Jain, and Greg Abel will take questions (forwarded on by shareholders and other interested participants) directly from CNBC's Becky Quick, as well as from shareholders in attendance at the live event in Omaha, Nebraska. Although the analyst panel has been set aside, we continue to believe it served as an effective means of eliciting details about Berkshire's operations. We feel that as the firm moves closer to the day when Buffett is no longer running the show, Berkshire should face tough questions about its operations, capital allocation priorities, and succession planning.