In order to implement an accurate and effective investment strategy on the Berkshire Hathaway share price, you can rely on the information we will provide in this article, which will enable you to carry out a good analysis of its share price. In this article, we will learn more about the company's precise activities, its main sources of income, its direct competitors on the international market and the recent partnerships it has set up. We will also give you a few tips for a successful fundamental analysis of this stock.
Like several companies in recent days, Berkshire Hathaway presented the figures for its 2020 financial year. The figures for its share buyback are impressive.
The strategy implemented by the Group to promote its international expansion through acquisitions or partnerships, for example.
Diversification of the Group's portfolios is also a growth strategy to be closely monitored.
Of course, we will also keep an eye on the evolution of government regulations and on the various financial crises or periods of recession that may plummet its activities.
Finally, and given that the insurance segment represents a large part of Berkshire Hathaway's business, account will be taken of the likely impact of certain natural catastrophes on its profitability.
Now let's take a few moments to find out a little bit more about who Berkshire Hathaway is and how it generates its revenue with its activities and sources of profit by segment.
The Berkshire Hathaway Group is an American holding company which is active in various business segments. It is thus possible to group the activities of this group into 6 main categories according to the share of turnover they generate :
At present, the Berkshire Hathaway Group employs 391,500 people.
We would now like to give you a quick overview of the Berkshire Hathaway Group's main competitors, mainly from the insurance sector. Here is a presentation of the main competitors:
American International Group Inc. is a global American property and casualty insurance network and one of the world's leading insurance and financial services companies. It has more than 56,000 employees and 90 million customers in more than 100 countries.
This British multinational company is also a major player in risk management, insurance and reinsurance brokerage, human resources consulting, and specialist insurance management and underwriting.
The German insurance group Allianz is the leader in this sector in Europe and ranks fourth worldwide in terms of asset management. In particular, it offers property and casualty and life insurance products and is present in Germany, Switzerland, France and Italy.
This other American group is one of the country's best-known insurance companies, thanks in particular to its strategic takeovers. This company was created through a spin-off from Sears.
Also known as the Metropolitan Life Insurance Company, MetLife is a US insurance company that offers creditor insurance and benefit guarantees for individuals, professionals and intermediaries. It is one of the world's leading insurance players with more than 90 million customers in some 60 countries.
If it is important to know the competition of the Berkshire Hathaway group, it is just as important to know its strategic allies. We now propose you to discover two recent examples of partnerships signed by this company.
Through its Business Wire subsidiary, Berkshire Hathaway recently partnered with this Canadian national non-profit organization specializing in the country's bio-economy in human resources. The objective of this alliance is to enhance BioTalent's Affiliate Plus program through Business Fire, which specializes in press release distribution and to broaden its audiences in the bio-economy sector in Canada and internationally. BioTalent partners will also be able to take advantage of special packages on BioTalent's dissemination services with Business Fire's segment news posted exclusively on BioTalent Canada's website.
The group has also signed a partnership with its competitor AIG which will transfer part of its long-term risks to Berkshire. This $10.2 billion transaction took place in June 2017. It is National Indemnity, the subsidiary of Berkshire which assumes 80% of the net losses related to these risks with a ceiling of 20 billion dollars.
At the beginning of 2020, the Berkshire Hathaway group had a total market capitalization of more than US$553 billion. Thanks to this very large capitalization, the company has managed to rank as the eighth largest company in the world by market capitalization.
It is interesting to look at the historical development of the Berkshire Hathaway share price in order to better understand the performance of this stock over the long term. Thus, we know that since January 1980, when it was floated on the stock exchange, the growth of this share has been impressive. The price of this stock has risen from $335 in January 1980 to more than $339,155 in January 2020, an increase of 101,140%.
The Berkshire Hathaway group has had a policy of not paying dividends since the beginning of its activities. Indeed, Warren Buffet believes that the company's money has the potential to be used in a better way for its growth rather than choosing to compensate its shareholders.
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