Due to a number of expansions in the insurance business, plus recent acquisitions and a strong third-quarter, Zacks earnings estimates were given an upward revision. In the last 60 days, the 2014 Zacks Consensus Estimate moved up by 1.4%. And for the 2015 estimate, it also moved up by the same consensus estimate amount. The long-term earnings growth expected of the company is 8.4%.
Earlier in December, there was an announcement by Berkshire Hathaway saying that they plan to acquire Charter Brokerage, which provides logistics to the chemical and petroleum industries. Before the announcement, Lubrizol announced that they were going to buy a number of units from Weatherford International PLC for $750 million.
Back in November, Berkshire Hathaway bought Duracell from Procter & Gamble. And they even acquired a TV stations from Graham Holdings back in July.
Investors are also very appreciative that Berkshire Hathaway was licensed to operate as a non-life insurer in the country of Singapore. The company has applied for licenses in the same vein in Europe, Hong Kong and Sydney. It looks to expand its operations and move past reinsurance operations. The business has been expanding insurance operations quietly, doing so in order to capitalize on the quick growing market that is underserved by the current insurers.
Investors were also impressed by the strong third-quarter earnings that Berkshire Hathaway has put up. The earnings outpaced the Zacks consensus estimate by 12.4%.
Investors are safe in knowing that the returns earned by Berkshire Hathaway are due in large part to Warren Buffett’s connection to the company as CEO and chairman. Buffett’s investment prowess has helped the company book value per share grow by 19.7% annually from $19-$134,973 over a 49 year period.