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QQQ   348.40
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S&P 500   4,205.45
DOW   33,093.34
QQQ   348.40
Stock market today: Markets mostly higher after Biden-McCarthy deal on US debt
AI Creates New Cancer Drug - In Just 30 Days! (Ad)
10 Ways Entrepreneurs Can Navigate a Down Economy
Get the Most Out of Remote Meetings and Avoid Meeting Burn Out
AI Creates New Cancer Drug - In Just 30 Days! (Ad)
A Woman Co-founder's Guide to Empowering Women in the Workplace and Advocating for Gender Equality
Open vs. Anonymous Employee Feedback — Which is Better?
Sell every Stock except ONE (Ad)
PwC Australia sidelines 9 directors as leak of tax information investigated
South African president appoints judge to oversee weapons-for-Russia inquiry
S&P 500   4,205.45
DOW   33,093.34
QQQ   348.40
Stock market today: Markets mostly higher after Biden-McCarthy deal on US debt
AI Creates New Cancer Drug - In Just 30 Days! (Ad)
10 Ways Entrepreneurs Can Navigate a Down Economy
Get the Most Out of Remote Meetings and Avoid Meeting Burn Out
AI Creates New Cancer Drug - In Just 30 Days! (Ad)
A Woman Co-founder's Guide to Empowering Women in the Workplace and Advocating for Gender Equality
Open vs. Anonymous Employee Feedback — Which is Better?
Sell every Stock except ONE (Ad)
PwC Australia sidelines 9 directors as leak of tax information investigated
South African president appoints judge to oversee weapons-for-Russia inquiry
S&P 500   4,205.45
DOW   33,093.34
QQQ   348.40
Stock market today: Markets mostly higher after Biden-McCarthy deal on US debt
AI Creates New Cancer Drug - In Just 30 Days! (Ad)
10 Ways Entrepreneurs Can Navigate a Down Economy
Get the Most Out of Remote Meetings and Avoid Meeting Burn Out
AI Creates New Cancer Drug - In Just 30 Days! (Ad)
A Woman Co-founder's Guide to Empowering Women in the Workplace and Advocating for Gender Equality
Open vs. Anonymous Employee Feedback — Which is Better?
Sell every Stock except ONE (Ad)
PwC Australia sidelines 9 directors as leak of tax information investigated
South African president appoints judge to oversee weapons-for-Russia inquiry

The Most Important Warren Buffett Stock for Investors: His Own

Key Points

  • Owning shares of Berkshire Hathaway stock is a way for investors to gain exposure to many of Warren Buffett’s favorite stocks. 
  • A key driver of the company’s overall performance is its insurance business, which allows it to put the float it receives from policyholders to work in the market. 
  • With an ample supply of cash on hand, the company is well positioned to deploy capital if it senses a buying opportunity.  
  • 5 stocks we like better than Berkshire Hathaway

warren buffett stocks

Investors could do worse than buying stocks owned by Warren Buffett. Some of the most famous Warren Buffett stocks include Apple Inc. NASDAQ: AAPLThe Coca-Cola Company NYSE: KO and Bank of America Co. NYSE: BAC. But the one stock that may be the best for investors to own is Buffett's holding company, Berkshire Hathaway Inc. NYSE: BRK.B

By investing in BRK.B stock, investors can enjoy many benefits of Buffett's stock-picking acumen. The company's holdings total over $334 billion and include the names mentioned above, along with companies like Chevron Corporation NYSE: CVX and American Express Company NYSE: AXP. Earlier this year, American Express chief executive officer (CEO) Stephen Squeri remarked that having Berkshire Hathaway own the company's stock was "sort of like a Good Housekeeping seal of approval." 


However, many investors don't make the connection between the companies that are part of the Berkshire Hathaway portfolio and the company's business model. But in a financial world full of unforced errors regarding interest rate risks, it's worth looking at the structure of Berkshire Hathaway. 

The Key Behind the Buffett Model 

Berkshire Hathaway is a conglomerate that reaches many sectors, including retail and energy. But the key driver of the company's overall performance is its insurance business. The purchase of the National Indemnity Company was Buffett's first acquisition when he took over Berkshire. 

This gives Berkshire Hathaway access to the float from insurance premiums, which serves as a cash cow for the company. "Float" is the money the company receives from its policyholders and can hold onto and invest until it needs to pay claims. 

In his most recent letter to shareholders, Buffett noted that this float "has increased 8,000-fold through acquisitions, operations and innovations." Unlike bank deposits, Berkshire doesn't have to worry about insurance clients digitally withdrawing their funds en masse. That means the company's equity portfolio, which was about $335 billion last year, is secure. 

And even inside that low-risk model, Berkshire still has a capital surplus of nearly $300 billion in its insurance units. Once again, unlike the banks, Berkshire holds cash — mostly in short-term Treasury bills and stocks, not bonds. As Treasury bills will reprice in yield, Berkshire will benefit from more interest income, already at $1.7 billion last year, a gain of 186%. 

Berkshire Hathaway's operating income should rise 11% this year to about $34 billion after taxes. The stock is trading for about 20 times projected 2023 earnings, below its historical average of 21 times, and for about 1.4 times its year-end 2022 book value, in line with the five-year average. 

The Best May Still be Yet to Come 

As Buffett pointed out in the company's annual letter to shareholders, 2022 was a good year by many measures. The company generated operating earnings after taxes of $30.8 billion. And at the end of the year, Berkshire Hathaway had nearly $129 billion in available cash. One of Buffett's fundamental investing precepts is to be greedy when others are fearful. That kind of cash balance gives Buffett all types of ammunition if he decides to make some aggressive bets. 

Should you invest $1,000 in Berkshire Hathaway right now?

Before you consider Berkshire Hathaway, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Berkshire Hathaway wasn't on the list.

While Berkshire Hathaway currently has a "hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Berkshire Hathaway (BRK.B)
0 of 5 stars
$320.60+0.5%N/A92.66N/A$377.00
Apple (AAPL)
2.7151 of 5 stars
$175.43+1.4%0.55%29.78Moderate Buy$174.73
Coca-Cola (KO)
2.3482 of 5 stars
$60.26-0.2%3.05%26.43Moderate Buy$67.80
Bank of America (BAC)
3.0285 of 5 stars
$28.31+0.5%3.11%8.50Hold$36.77
Chevron (CVX)
3.2042 of 5 stars
$154.08-0.3%3.92%8.32Moderate Buy$194.12
American Express (AXP)
2.8193 of 5 stars
$157.24+4.1%1.53%16.53Hold$174.50
Compare These Stocks  Add These Stocks to My Watchlist 

Chris Markoch

About Chris Markoch

Contributing Author: Retirement, Individual Investing

Chris Markoch is a freelance financial copywriter with over five years of experience covering various aspects of the financial markets. You may find his writing a little different than other stock articles you’ve read. And that’s OK with him. Chris doesn’t have a traditional finance background. What he does bring to the table is a strong business and marketing background having worked for agencies that serviced Fortune 500 companies. With that in mind, he isn’t overly impressed with what companies say, and more focused on what they do. And because buyer behavior dictates so much of what happens with a stock, Chris always keeps the end consumer close in mind. Chris has been writing for MarketBeat since 2018.

Contact Chris Markoch via email at CTMarkoch@msn.com.
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