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Russian (RU) Bram Berkowitz, The Motley Fool
Sat, Jun 7, 2025, 5:50 PM 5 min read
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Berkshire Hathaway is run by none other than Warren Buffett, arguably the greatest investor of our time.
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Berkshire's stock has outperformed the S&P 500 this year and hit all-time highs.
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Investors seem to like the company's diversity of businesses and its management, and view the stock as a flight to safety.
Once the Trump administration began to implement sweeping tariffs against major trading partners of the U.S. in April, investors, sensing a significant disruption in the market, ditched U.S. risk assets and ran for cover. They piled into cash, gold, and assets they believed could provide a port in the storm.
One of those happened to be Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), one of the largest conglomerates in the world, run by arguably the world's best investor, Warren Buffett. Berkshire's stock was up nearly 10% (as of June 4), compared to the broader benchmark S&P 500's roughly 2% gain. Berkshire's stock also hit all-time highs earlier this year. Is the stock still a buy today?
Aside from Buffett and his strong team of investing lieutenants and managers, one thing investors seem to like about Berkshire is the diversity of businesses under the large conglomerate's umbrella. Berkshire not only operates a massive stock portfolio, but also a large insurance business as the owner of Geico. The company also owns a slate of energy assets, the Burlington North Santa Fe Railroad, and a mortgage business, among others.
It might be difficult for some of these sectors to operate alone, but together they provide diversity and have turned Berkshire into a juggernaut that generated over $89.5 billion of earnings in 2024. It also had $47.4 billion of operating earnings, which Buffett believes is a better metric for the company because it strips out volatile unrealized capital gains and losses.
Another reason investors view Berkshire as a flight to safety is because of the company's massive cash hoard. Combined, Berkshire's cash, cash equivalents, short-term U.S. Treasury investments, and investments in fixed-maturity securities totaled an incredible $357 billion. Berkshire now reportedly owns about 5% of the short-term Treasury bill market. The massive pile of cash gives Berkshire a huge margin of safety -- and also a war chest, should opportunities arise in the market that Berkshire finds compelling.
Now, after a strong run, it's always important to look at a stock's valuation. One way investors like to value Berkshire is on a price-to-tangible book value (TBV) basis, which is a frequent way investors value bank and insurance stocks.
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