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Berkshire Hathaway Inc. (BRK.B) Gains But Lags Market: What You Should Know

Zacks Equity Research

Berkshire Hathaway Inc. (BRK.B) closed at $229.73 in the latest trading session, marking a +0.6% move from the prior day. This move lagged the S&P 500's daily gain of 0.84%. Meanwhile, the Dow gained 0.92%, and the Nasdaq, a tech-heavy index, added 1.06%.

Prior to today's trading, shares of the company had gained 1.48% over the past month. This has lagged the Finance sector's gain of 1.6% and the S&P 500's gain of 3.95% in that time.

BRK.B will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.53, up 9.05% from the prior-year quarter.

Any recent changes to analyst estimates for BRK.B should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.69% lower. BRK.B is holding a Zacks Rank of #4 (Sell) right now.

Valuation is also important, so investors should note that BRK.B has a Forward P/E ratio of 21.03 right now. Its industry sports an average Forward P/E of 13.79, so we one might conclude that BRK.B is trading at a premium comparatively.

Meanwhile, BRK.B's PEG ratio is currently 3. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BRK.B's industry had an average PEG ratio of 1.7 as of yesterday's close.

The Insurance - Property and Casualty industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 70, which puts it in the top 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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