6/19/2023 0 Comments Take five lead sheet![]() Precision-scheduled railroading (PSR) is a strategy that's gained steam in recent years among railway companies. Berkshire's railway operator shrugs off a top industry trend ![]() "In our view, Berkshire is the only company with the balance sheet that can take this amount of exposure in Florida." 3. "This strategy is characteristic of BRK RE's opportunistic approach to property cat reinsurance," Meredith wrote. Otherwise, the firm's reinsurance division will suffer heavy losses. ![]() ![]() If the state escapes hurricane season scot-free, Berkshire will see a $7 billion profit on that bet, Meredith noted. The hopes of Berkshire Hathaway investors are hinging on hurricane season, since the company's reinsurance division has $15 billion worth of exposure to Florida, much of which includes coverage of businesses that renewed their catastrophe protection in early April. Sunshine State residents won't be the only ones glued to hurricane forecasts this year. If Florida dodges hurricanes, Berkshire will be in the clear "GEICO is likely to lose some business as it attempts to reach its target profitability of a 96 combined ratio (expected by year-end 2024), through reducing advertising and raising prices," Meredith wrote. That means fewer sightings of the company's iconic green gecko. Meredith believes that GEICO must keep up with rivals by upgrading its outdated systems and strategically investing in data and analytics, while simultaneously returning to target profitability by raising prices and reducing its marketing spend. However, the analyst shaved his 2024 earnings estimate for the business due to the daunting slate of challenges it still faces. GEICO must invest in tech, cut ads to keep increasing profitsīerkshire's insurance giant posted a convincing beat in its underwriting business in Q1 and should continue to be profitable this year, Meredith noted. The following are the five most noteworthy nuggets from Berkshire's summit, in Meredith's view. "We viewed Berkshire's 2023 annual meeting as the best in several years with quality questions and insightful answers," Meredith wrote. Meredith was struck by the insight of the latest commentary issued by Buffett and fellow investing legend Charlie Munger. Strong earnings results were just one impressive component from Berkshire Hathaway's annual meeting. 5 top takeaways from Berkshire Hathaway's annual meeting "We continue to believe BRK's shares are an attractive play in an uncertain macro environment," Meredith wrote in a May 8 note. Based on its intrinsic value, he thinks the firm is undervalued by 15%. In response to the robust report, Meredith boosted his price targets for Berkshire's stock from $556,612 to $565,580 for A shares and from $371 to $377 for B shares. The strong bottom-line results were due to a dramatic improvement in insurance underwriting and insurance investment income year-over-year, while investors were pleasantly surprised by a large share buyback of $4.4 billion in the first quarter. The Omaha, Nebraska-based conglomerate posted first-quarter operating earnings of $5,537 for A shares and $3.69 for B shares, beating expectations of $5,244 and $3.50, respectively. Warren Buffett's Berkshire Hathaway had its "best annual meeting in years" over the weekend, according to UBS analyst Brian Meredith - and it wasn't just because of its strong earnings report.
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