Buy Berkshire Hathaway shares: Forecasts, Strategies And Targets
Published: September 23, 2020 by Valentina
Berkshire Hathaway Inc. is the largest conglomerate of companies, or at least the most famous in the world, largely due to the notoriety of its founder: Warren Buffett, so-called Oracle of Omaha. This fame makes buying Berkshire Hathaway shares a truly profitable investment, but there are still some factors to consider before investing in it. Let’s find out together.
First, we must consider how to make the investment: To buy Berkshire Hathaway shares, you need an intermediary and CFD brokers like eToro are certainly the safest and cheapest platforms for making equity investments. This is especially because they allow you to trade without paying commissions. Here are the best brokers on the market:
Min. Deposit: 50€
Min. Deposit: 100€
Min. Deposit: 50€
Min. Deposit: 250€
Min. Deposit: 100€
Min. Deposit: 250€
Berkshire Hathaway: What is it?
Forbes magazine named Berkshire Hathaway the eighth (publicly traded) company in the world; in tenth place by turnover and first as a financial services company.
The company is also famous for the leadership of Warren Buffett, president and chief executive officer, and Charlie Munger, one of the company’s vice presidents.
In the early part of his career at Berkshire, Buffett focused on long-term investments in publicly traded companies, but more recently, he started to buy whole companies, making this “conglomerate” a huge container of companies as well as an investment fund.
This financial conglomerate now owns a wide range of businesses including confectionery, retail, railways, home furnishings, encyclopedias, vacuum cleaner manufacturers, jewelry, uniform manufacturing and distribution, and several electricity and gas supply companies.
Berkshire Hathaway assets
Berkshire Hathaway is based in Omaha, Nebraska, the hometown of its founder. The firm owns – among others – Duracell, Fruit of the Loom, and Helzberg Diamonds and has significant minority stakes in companies like Kraft Heinz Company (26.7%), American Express (17.6%), Wells Fargo (9%), Coca-Cola Company (9.32%), Bank of America (11.5%), and Apple (5.4%).
Since 2016, Buffett’s fund has invested in large airlines, but at the beginning of 2020, it got rid of a large part of these investments due to the crisis linked to the coronavirus epidemic, which put aviation into crisis.
Berkshire Hathaway has recorded an average annual growth of 19.0% since 1965 (compared to 9.7% for the S&P 500 with dividends included for the same period).
With the great Warren Buffett still at the helm after decades, investors are always curious about what the Oracle of Omaha will do. After a poor first-quarter report was dragged down by the pandemic-related share sale, the second quarter of 2020 showed an important return on investment from Buffett and this pushed earnings higher.
Undoubtedly, the most interesting and most important aspects of Berkshire Hathaway’s quarterly report are the non-operational aspects of equity holdings and share buybacks. Investors know that Berkshire Hathaway is a conglomerate, but the addition of Warren Buffett and an estimated $ 200 billion equity portfolio makes this company an intertwining of equity investments, ETFs, and mutual funds all packed into a single share.
How to buy Berkshire Hathaway shares?
Even if we are talking about one of the largest companies in the world, buying Berkshire Hathaway shares is not difficult: With a CFD broker you can invest directly from home.
CFDs are contracts for difference, or regulated derivatives, that have the same price as the corresponding asset and allow you to invest up or down (short selling) without paying commissions.
With CFD broker, you invest like this:
- To buy Berkshire Hathaway shares, you have to buy the “Berkshire Hathaway” CFD and you will make a profit if the stock prices go up.
- If, on the other hand, you are investing on the collapse of Berkshire Hathaway stock prices, you must sell the “Berkshire Hathaway” CFD and you will earn if the prices fall.
Once the desired result has been reached (up or down), just close the transaction and any profit (if you have made the right forecast) will be yours, with no commissions to pay.
Buy Berkshire Hathaway shares with the best platforms
The best trading platforms are those with a regular FCA or CySEC license.
These brokers allow you to invest in many markets such as stocks, indices, ETFs, commodities, etc. and the most suitable to buy Berkshire Hathaway shares are eToro, ForexTB and IQ Option.
eToro: Automated trading and intuitive platform
eToro is the most popular broker in the world and with its FCA license, it allows you to invest in total security, also thanks to its intuitive and very fast platform.
The screenshot below shows the Berkshire Hathaway stock as it appears on the eToro platform:
To buy Berkshire Hathaway shares (or sell them), you have to click on “Invest”, decide whether to Buy or Sell the stock, and how much to invest in the single operation.
For those who prefer automatic investments, eToro has developed a system to copy the operations performed by the best traders in the world (on eToro) in an automatic and totally free way: Copy Trading.
This system works like this:
- Register on eToro
- In the section “people”, you can choose the traders to copy based on the performance.
- With a click, Copy Trading will copy exactly the same operations of the chosen traders in your account.
- At this point, you will get the same returns as these trading experts (of course, in proportion to your investment), without doing anything else.
Here are some of the best eToro Traders:
Both Copy Trading as well as traditional trading can also be tested on a free Demo account, without taking real risks.
For more details you can read our full eToro review.
ForexTB: Trading Course and Free Trading Signals
ForexTB has a CySEC license and has the particularity of offering everything regarding the training and support for its investors. To start with, it offers two trading platforms:
- The web platform is easy to use and can be entered from any browser without downloading any software.
- Metatrader 4 is more technical and full of professional indicators and meets the needs of the more experienced traders.
ForexTB training starts from one of the best trading courses on the market, which is offered for free to all users, and allows you to know the rules underlying technical analysis.
The operational support consists of the free trading signals that are sent to all investors. They are reliable and precise operational indications, developed by the Trading Central, and have a success rate of 70%. With the official link below you can receive them for free:
IQ Option: Minimum deposit and training
IQ Option, regulated in the UK by the FCA, has reached a large number of users mainly thanks to the minimum deposit required of only 10 Euros.
With only 10 Euro, you can start investing for real and this small amount opens the doors of online trading to everyone, even to those who do not have great financial resources.
With this broker, you can buy Berkshire Hathaway shares by investing a few Euros and experience the sensations of a real investment without taking too many risks.
Of course, for those who want to test first and get to know the platform, IQ Option also offers a Demo account, where you don’t risk anything.
The trading platform of this broker is functional and complete, presents the main indicators necessary for technical analysis, and offers a truly complete didactic area for learning more about everything related to online trading.
Buy Berkshire Hathaway shares: Live Quote
Berkshire Hathaway shares dividends
Despite amassing over $ 100 billion in profits, Warren Buffett has never paid a dividend to his shareholders
What Buffett constantly strives for is to buy back Berkshire Hathaway’s common shares. This increases operating profits and drives up the price of the shares themselves.
Buffett and his team spent the record amount of $ 5.1 billion to buy back Berkshire Hathaway shares during Q2 2020.
Is Buying Berkshire Hathaway Shares Worth It?
As of August 2020, Berkshire Class B is the seventh largest component of the S&P 500, one of the most important stock indices in the world and the company is famous for having the most expensive share price in history: Indeed, shares class A cost around $ 300,000 each.
This price is due to the fact that this stock has never been split and Buffett himself, one of the most famous traders in the world, stated in a letter to shareholders in 1984, that he does not intend to divide the shares. In order to make them more “purchasable”, he has created the class B shrares, which are more affordable.
Below is the 5-year chart with the returns of Berkshire Hathaway’s class B shares. The trend goes up, despite the stop in the first months of 2020.
Q2 2020 net profit of $ 26.295 billion looks huge, but the earnings for the first half of 2020 still mark a loss of $ 23.451 billion mainly due to the outbreak of the Covid-19 pandemic.
Berkshire Hathaway Competitors
There are no real competitors of this huge financial conglomerate. This is not just a fund or a financial services company, but a set of companies and services that does not find any other similar example in the world. Below, we have listed the major competitors in the most representative sectors of the Buffett fund:
- State Farm
Buy Berkshire Hathaway Shares: Forecasts
According to Zacks Investment Research, Berkshire Hathaway Inc. (NYSE: BRK.B) will report earnings of $ 9.66 per share for the current financial year, with EPS (earnings per share) estimates ranging from $ 9.50 to $ 9.82.
For the next fiscal year, analysts expect the company to reach earnings of $ 10.81 per share. Zacks Investment Research’s earnings per share calculations are an average based on leading economic research and analysis firms.
Long-term forecasts are on the upside, but on the short-term Berkshire Hathaway stock is very volatile and you need to beware of any sudden movements.
Buy Berkshire Hathaway Shares: Strategies for Investing
To buy Berkshire Hathaway shares, you must respect the basic rules of online trading. Here are the most important:
- You should never invest more than 3% of the available capital on a single operation.
- The Stop Loss must be set at the time of the order, taking into account the Fibonacci retracements and the Pivot Points.
Here are the strategies derived from the forecasts on Berkshire Hathaway made by the major investment banks:
- In the short term (a few weeks or months), you can invest upwards until the price is below the target of $ 249.00 and then follow the fluctuations with a Swing Trading strategy.
- In the long term (over 6 months), you can buy Berkshire Hathaway shares and keep them in your portfolio looking for a good economic return. It is important to protect yourself from retracements by bringing the stop loss to the entry level as soon as possible.
Berkshire Hathaway shares: Target price
Analysts at the eToro Trading Desk remain long-term bullish on Berkshire Hathaway shares, setting a target price of $ 367,000.00 for BRK A and $ 249.00 for BRK B within the next 12 months.
Buying Berkshire Hathaway shares remains one of the most interesting investments on the market, because it’s like having Warren Buffett as an investment advisor… not bad right?
Before investing any money, if you have no experience with trading platforms, it is preferable to do some tests in Demo, without running any risk. Then, you can start with the minimum deposit required by the CFD broker you have chosen. Here are the official links to access the Demo accounts:
- Access the eToro Demo account for free by clicking here
- Register on ForexTB and try the Demo account by clicking here
- Access the IQ Option Demo account for free with this link
Berkshire Hathaway is a conglomerate of companies, investments and financial services led by Warren Buffett.
Yes, but it is necessary to evaluate the optimal investment strategy. In our guide there are some insights about it.
The 12-month target price for Berkshire Hathaway class B is $ 249 per share.
eToro is the most suitable online broker to buy Berkshire Hathaway shares safely and without paying commissions.