Berkshire Hathaway is a holding firm that owns a number of companies, including GEICO and Fruit of the Loom. Warren Buffett, world renowned investor and businessman, serves as chairman and CEO. Follow our guide to learn how you can buy Berkshire Hathaway stock and start investing.
Quick History of Berkshire Hathaway Company
Berkshire Hathaway Inc. is an American holding corporation based in Omaha, Nebraska, dating back to 1839. Warren Buffett, the company’s chairman and CEO, is well-known for his presence and management and the operations.
Berkshire Hathaway operates within the financial services sector with a $659.484B market cap. Throughout their multiple subsidiaries, they reach markets including but not limited too insurance, railroad transportation, and utility businesses.
Historically, Berkshire Hathaway’s stock price seems mildly volatile and steadily increasing. Overall it seems analysts recommend that it is a good long term hold.
The Good and Bad of Berkshire Hathaway Stock
Owning stock or shares in any firm has various advantages and disadvantages. Here are some of the benefits and drawbacks of holding Berkshire Hathaway stock.
Pros of Owning Berkshire Hathaway Stock
- A major part of the company is operating as an insurance company. This allows the firm access to quick and cheap capital through collecting insurance premiums. This can be seen as an advantage as less funding will be needed to be borrowed, thus lowering chances of bankruptcy.
- The corporation is making strides towards being more environmentally friendly as well as in efforts to improve their ESG rating. Improvement in ESG scores is expected to help open up the floor to more investors as well as provide opportunity for Berkshire Hathaway to be included in mutual funds and ETFs which will help raise the company’s valuation.
Cons of Owning Berkshire Hathaway Stock
- In the last five years, Berkshire Hathaway stock has pretty consistently been beat by the S&P 500 rate of return.
- It seems as if Buffet has a pessimistic outlook on the economy and that operations and investments (which are needed to grow) have been taking a step back.
Outlook for Berkshire Hathaway Stock
Berkshire Hathaway announced first-quarter operating profit of $7.018 billion, up 20% from $5.871 billion the previous year. Berkshire Hathaway reported net profit of $11.71 billion in the first quarter, or $7,638 per Class A share.
Following with a high of $24.7 billion in buybacks last year, the corporation repurchased $6.6 billion of Berkshire shares in the first quarter. As a firm who historically has not participated much is stock buybacks, this can be a positive signal to investors as a positive outlook for the firm.
Steps to Buy Berkshire Hathaway Stock
Follow these 5 easy steps to begin buying Berkshire Hathaway stock today!
Step 1: Select a Brokerage
To invest in Berkshire Hathaway you’ll need a brokerage account to trade on. There are several different options with varying features to chose from, so compare your options are see what would be best for you.
Options range from fully online and automated brokerages to more traditional face to face brokerages. Here is a list of our favorite brokerages we recommend checking out.
Step 2: Open the Trading Account
After you’ve decided which brokerage is best for you, you’ll need to open an account with them. This account will be used for posting transactions and stock trading.
Depending on the firm you go with the application process may vary, but generally it will be laid out step by step.
Step 3: Deposit Funds Into the Account
After you’ve linked an accepted payment method to your account, you’ll be able to deposit money to buy Berkshire Hathaway stock. Make sure you deposit enough funds to cover the amount of shares you wish to purchase.
Some brokerages may have a couple day transfer period and other do not. Make sure to double check so that you are able to buy the stocks when you want to.
Step 4: Search for the Berkshire Hathaway Ticker Symbol (BRK.A)
Find the stock by searching for the name or ticker symbol and do some planning in advance to find out whether it’s a smart investment for you. You will also want to make sure the brokerage account you set up offers this stock; searching BRK.A is a good way to find out.
Step 5: Purchase Berkshire Hathaway Stock
At the bottom of each page, brokers will have a “deal ticket” where you may place your order. On the broker’s order form, you will input the symbol and the quantity of shares you desire to acquire.
With a market order, you can buy as many shares as you like, or you may use a limit order to delay the purchase until the stock hits a certain price.
Is Berkshire Hathaway a Good Buy?
It’s unknown how much Berkshire Hathaway’s stock will shift overtime. Berkshire Hathaway experienced a strong quarter, and its long-term plan seems to be very sustainable in this economy.
Investors interested in the company might add it to their watchlist and wait for a new purchasing opportunity to present itself. Shareholders should be pleased because the firm is on strong ground moving ahead. If you would like to start investing in different stocks on the stock exchange you should consider contacting a financial advisor as well as doing your own research.