We recently compiled a list of the 10 Best Holding Company Stocks To Buy Now. In this article, we are going to take a look at where Berkshire Hathaway Inc. (NYSE:BRK-B) stands against the other holding company stocks.
“The Market is Anticipating Too Much”
Some may think the Fed meeting on the 18th of September may have put an end to the basis point cut debate, however, while the Fed did initiate a rate cut by half a percentage, two Fed meetings are remaining before the end of 2024. To discuss the likely rate cut path, Chris Versace, Tematica Research CIO, appeared in an interview on Yahoo Finance on September 24.
Versace suggests that it is quite impossible to predict the path the Fed is to adopt before 2024 ends and the decision will likely be more reliant on data. The labor market weakened for the second consecutive month and, according to him, the Fed will probably go for another 50 basis point cut, if not more.
He urges investors and traders to triangulate all data points to make decisions including economic data, inflation data, and the speed at which the economy is growing. Versace states that the market right now is stretched and that there is more to the bigger picture such as the upcoming elections, earnings growth, and the Fed’s decisions.
“Volatility Should Remain Elevated”
On September 25, Burns McKinney, NFJ Investment Group Managing Director & Senior Portfolio Manager, appeared in an interview on Yahoo Finance to discuss the market outlook. Amid declining consumer confidence and a shrinking job market, volatility, according to him, will remain a constant element.
He suggested that signs of job weakness coupled with inflation have impacted consumer confidence negatively, especially after the Fed’s decision. McKinney added that there is a disequilibrium in the number of jobs vacant and the number of workers available right now, leading to weakened employment data.
From an investor standpoint, he deems volatility a constant state of the market, given that the country also has an upcoming election in the coming weeks. In addition to that, geopolitical tensions in Europe and the Middle East will likely add to the turmoil. McKinney shares that investors should focus more on dividend-paying stocks to remain secure and resilient through the volatility.
Despite the turmoil, some stocks may always be promising given their strong footing and dominance in the industry. With that, let’s take a look at the 10 best holding company stocks to buy now.
Our Methodology
To come up with the 10 best holding company stocks to buy now, we examined multiple rankings on the internet and our rankings. We then ranked the top 10 based on the largest number of hedge fund holders at the end of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of insurance professionals in a boardroom overlooking a city skyline.
Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 120
Berkshire Hathaway Inc. (NYSE:BRK-B) is a multinational company with businesses in multiple industries including financial services, insurance, energy, transportation, rail, and utility. The company not only provides services across several insurance lines, but also engages in the generation and distribution of electricity from natural gas, coal, wind, solar, and nuclear sources. Berkshire Hathaway retails household appliances, electronics, kitchenware, and motorcycle equipment. Some of its subsidiaries include GEICO, Dairy Queen, HomeServices of America, and Berkshire Hathaway Energy.
In the second quarter of 2024, Berkshire Hathaway Inc. (NYSE:BRK-B) logged $93 billion in revenue, of which $26 billion came from insurance. In the first half of 2024, the company’s investment income increased by 36% year-over-year. GEICO, Berkshire’s auto-insurance subsidiary now provides coverage for 28 million vehicles, up from 17 million in 2019.
Berkshire Hathaway Inc. (NYSE:BRK-B) holds a strong position in the world, especially in the United States. It has ownership rights and control over multiple major companies across the globe, contributing to its position on our list. According to the company’s latest shareholder letter, it currently owns 6% of the entire universe in which it operates.
Berkshire Hathaway Inc.’s (NYSE:BRK-B) competitive edge lies in its presence in multiple industries diversifying its risk and making it one of the best holding company stocks to buy now. According to our database, 120 hedge funds held stakes in Berkshire Hathaway Inc. (NYSE:BRK-B) in the second quarter, with positions worth $12.54 billion. With stakes amounting to $10.02 billion, Bill & Melinda Gates Foundation Trust is the largest shareholder of the company, as of June 30.
Overall BRK-B ranks 2nd on our list of the best holding company stocks to buy. While we acknowledge the potential of BRK-B as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BRK-B but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.