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James Li
James Li
Articles (1441)  | Author's Website |

Berkshire's Top Holdings Post Investment Gains in the 3rd Quarter

Insurance conglomerate releases quarterly results as Dow hits new intraday high

On Monday, shares of Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) soared over 5% on the heels of the Omaha, Nebraska-based insurance conglomerate recording record share repurchases during the third quarter, coupled with strong gains in the equity portfolio's top holdings.

Buffett's conglomerate purchased approximately $2.55 billion worth of Class A stock and approximately $6.71 billion in Class B stock, smashing the UBS estimate of quarterly share repurchases of just $3.2 billion total. Additionally, the $9.26 billion worth of share repurchases topped the second-quarter total share repurchases of approximately $5.1 billion.

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Operating earnings decline but investment gains skyrocket

Berkshire reported operating earnings of $5.478 billion, down over 30% from third-quarter 2019 as the coronavirus pandemic negatively impacted the conglomerate's businesses, primarily in manufacturing, service and retail. Despite this, investment gains soared over 82% year over year to $30.137 billion, driven by gains in the equity portfolio's top holdings.

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Shares of Apple Inc. (NASDAQ:AAPL), the top holding of Berkshire, increased approximately 2% on Monday, adding to its over 25% rally during the third quarter. Likewise, Coca-Cola Co. (NYSE:KO) gained over 10% during the third quarter.

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Markets start new week with a bang as Dow hits record intraday high

The Dow Jones Industrial Average hit a new all-time record intraday high of 29,933.83, just shy of the 30,000 milestone and up 1,610.43 points from last Friday's close of 28,323.40 on the heels of Pfizer Inc. (NYSE:PFE) and BioNTech SE (NASDAQ:BNTX) announcing that their candidate vaccine prevented with an over 90% effective rate the Covid-19 virus in participants without evidence of prior infection in the companies' first interim efficacy analysis. Dr. Albert Bourla, CEO of the New York-based drug manufacturer, called the observation "a great day for science and humanity."

Shares of Pfizer and BioNTech each soared over 7% on the news. Based on its current price-to-GF Value ratio of 1.09, Pfizer is fairly valued according to GuruFocus' unique valuation method.

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Disclosure: Long Apple.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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