Even though Berkshire Hathaway was not able to grow its net worth quicker than the S&P 500 index over the past five years, they did reach a major milestone though. The company passed the $300 billion market capitalization mark for the very first time.
Since reporting record earnings last week, the Berkshire Hathaway stock has risen by 3%. They made a net profit of $19.5 billion on $182 billion worth of revenue. Analysts made several “strong buy” ratings after the earnings news, and as the housing market and US economy continues to grow stronger, you can expect Berkshire Hathaway to have another great year in 2014.
Class A shares of Berkshire Hathaway were trading at around $183,000 this past Friday morning, and that gave the Omaha, Nebraska business a $301.4 billion market value. The increase in share price came with an overall good year for the stock market. The S&P rose 32% in 2013, and this includes dividends. Berkshire Hathaway shares, on the other hand, rose roughly 30% last year.
Berkshire Hathaway is currently part of the top 10 largest companies in the United States by market capitalization. Throughout recent years, they have often been on the top five lists. Even reaching the $300 billion mark, this hasn’t changed their position all that much as far as being one of the most valuable companies in the United States. Apple currently leads the pack with a $475 billion market, immediately followed by Google at $409 billion; Exxon Mobil with $405 billion, Microsoft comes in at fourth place at $316 billion just the head of Berkshire Hathaway.
Even though the share price has risen tremendously, Buffett still believes that the stock price is relatively cheap, which he talked about in his most recently published annual letter. Buffett has mentioned that he and Berkshire Hathaway will buy back shares if the stock price drops below 1.2 times book value per share. At the close of 2013, Berkshire’s per-share book value was $134,973. That comes to a total of 1.35 times book value. Since the market is very enthusiastic about Berkshire Hathaway, we do not expect it to drop lower anytime soon.