On June 7, 2013, shares of Berkshire Hathaway Inc. (BRK.A) (BRK.B) hit a 52-week high of $115.32. The momentum was driven by the recently closed acquisition of H.J. Heinz Co., the agreement to acquire NV Energy and strong first quarter earnings.
On May 3, 2013, Berkshire Hathaway reported first quarter 2013 operating earnings of $1.53 per share, higher than the Zacks Consensus Estimate of $1.30 per share as well as year-ago earnings of $1.08 per share.
Earnings outperformance was driven by higher contribution from insurance, railroad utility and energy segment as well as manufacturing , servicing and retailing segments.
Last week the company completed the acquisition of H.J. Heinz Company. Berkshire is expected to benefit from Heinz’s robust global portfolio of leading brands, which focuses on three attractive and growing food categories: ketchup and sauces, meals and snacks, and infant/nutrition. Also Heinz has a strong market position where it is consistently delivering solid organic growth, showing continued and strong improvement in the emerging markets, making robust marketing investments, continuously innovating and reducing expenses aggressively.
Last month Berkshire also announced acquisition of NV Energy Inc. The deal will be a strategic fit for Berkshire which already derives 22% of revenue from energy business. The deal is expected to see light in the first quarter of 2014. Berkshire’s huge cash holding of $48 billion will fund the acquisition.
The deal will enable Berkshire to serve nearly 1.3 million electric and natural gas customers in Nevada. MidAmerican already serves 7.1 million Americans across 10 states. Berkshire bought MidAmerican in 2000.
Berkshire Hathaway retains a Zacks Rank #2 (Buy). Other players from the same industry such as Alleghany Corp. (Y), Hanover Insurance Group Inc. (THG), State Auto Financial Corp. (STFC) carrying Zacks Rank #1(Strong Buy) are worth considering.