For shareholders of Berkshire Hathaway, it's like the stock market correction hasn't even happened. Shares of the company helmed by famed investor Warren Buffett are up more than 16% so far this year and near a record high.
The stock has climbed four the past five weeks and three months in a row. By comparison, the S&P 500 is down about 5% and on down five of the past six weeks.
Shares broke out past a 491.67 buy point Feb. 24 on a robust fourth-quarter report. That proved to be a successful breakout: The stock is 7% above the entry. It is extended from its 5% buy zone, so investors should wait for another chart setup to emerge.
Shares dipped less than 1% in premarket trade on Monday.
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Buffett's investment powerhouse reported Q4 earnings per share that jumped 72% year over year, well above analysts estimates. Revenue edged up less than 2% to $94.196 billion, also above views. The company's Geico insurance business led the strong quarter.
As previous stock market winners such as the Magnificent Seven, artificial intelligence plays wane, investors are liking Buffett's value-focused investing approach. Rather than growth, Buffett prefers buying high-quality stocks at a low valuation, and holding for long-term gains.
But his long-term outlook goes only so far. Buffett has deftly cut stakes in underperforming stocks such as Bank of America and Citigroup.
Risks In Warren Buffett Stock
The Berkshire portfolio still has some risky assets. For example, Berkshire's 83 auto dealerships face the likelihood that U.S. import tariffs will hurt new-vehicle sales. Energy price fluctuations influence the performance of its energy holdings.
The firm's two largest holdings, according to Whalewisdom.com, are Apple and American Express. Both stocks are struggling, trading below their 200-day moving averages and down more than 10% year to date.
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The Buffett stock has a 21-day average true range (ATR) of 1.88%. The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR.
Stocks that tend to make more incremental moves have lower ATRs. In the current, unpredictable market, IBD suggests stocks with ATRs of 3 or below.
Berkshire's class A shares, which trade under the symbol BRKA, mirror the performance of the class B shares. BRKA trades only about 1,600 shares a day due to a share price that is near 800,000. Class B shares are priced around 525 and have an average daily volume of 4.478 million shares.
