On the rebound of the BNSF Railway and manufacturing revenues back by the policies of the Trump administration, Berkshire Hathaway (NYSE:$BRK.B) has seen a strong operating performance in recent quarters. The firm is also seeing a marginal growth due to weak underwriting profits in the insurance sector. In total, Berkshire is expected to see a marginal topline growth of 1.0% in 3Q17 on a year-over-year basis, to a cool $59.7 billion.
But, have recent calamities Hurricanes Harvey and Irma affected Berkshire’s performance? For starters, Berkshire operates as a conglomerate and an active asset manager, resulting in diversified earnings with a markup over the broad index. WIth a market cap of $449 billion, let’s not forget that Berkshire is one of the largest holding companies in the entire world. Further, Berkshire also has a cash pile of around $100 billion, which may continue to increase if the company chooses to forego investment opportunities.
Further, Berkshire has hedged its energy portfolio by investing in utilities, marketing, upstream, downstream, and transmission businesses. That results in stable earnings that are less susceptible to fluctuating oil prices.
Let’s also not forget the Trump administration’s recent push toward manufacturing in a bid to revive growth in the United States and stricter Chinese import regulations. Berkshire’s interest in manufacturing has continued, even during the growth era of the service sector. The company could seek even more investments in the manufacturing space since policies are tilted toward higher growth.
In other words, despite the recent blowouts from a series of unfortunate calamities, Berkshire appears to be indestructible thanks to its skillfully diversified portfolio.
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