Here's Why Berkshire Hathaway Stock Is a Buy Before July
There's something coming early next month that won't be game changing but could inspire a wave of new confidence in its future.
Anyone that knows anything about Berkshire Hathaway (NYSE: BRK. A) (NYSE: BRK.B) understands that it's unlike any other company. It's one part conglomerate, one part mutual fund, and one part private equity outfit. That's why the business updates it posts every quarter aren't quite as closely watched as those of more conventional companies -- they just don't mean as much, since they're not exactly snapshots of its operations.
Still, investors thinking about taking on a position in Berkshire Hathaway might want to do so before the end of June. Although its second-quarter earnings report due sometime in early July won't technically mean any more than it usually does, this particular report could prove particularly catalytic -- in a bullish way. Here's why.
The image below is a snapshot from the first page of Berkshire's first-quarter earnings report...a document that's typically only two pages long. The reported investment gains reflect the (mostly unrealized) gains or losses stemming from the rise or fall of the stocks held by the conglomerate. Operating earnings, on the other hand, come from the net cash produced by the company's privately held businesses like Dairy Queen, railroad BNSF, and insurer Geico during the three-month stretch in question. Note that even Berkshire Hathaway itself believes the reported investment gains or losses mean very little in any single quarter. Buffett and his lieutenants truly are thinking much longer term.
