The dearest stock in the US, Berkshire Hathaway shares hit 200k dollars for the first time. The Warren Buffet company, which he took over five decades ago, is now worth an estimated $326 billion.
The company’s class A shares cost sixty times as much as those of transportation and agriculture firm Seabord Corporation, the next most expensive stock in the US.
Mr. Buffet and his longtime partner Charlie Munger never split Berkshire Hathaway’s A shares, although B shares are available at $134 each.
The two partners have always said that splitting the stock would undermine the quality of the investment because it would mean its price would be less consistently linked to intrinsic business value. They also felt the lofty price would act as a deterrent to opportunist short-term traders.
On Thursday, Berkshire Hathaway shares increased by $3,241, closing at $202,850.
A single Berkshire Hathaway share costs nearly as much as the national median existing single family home in the United States ($212,400).
America’s 4th largest company
According to the latest Fortune 500 list, Berkshire Hathaway is the fourth largest company in the United States, posting revenue of $182 billion and profits exceeding $19 billion. In 2013, its per-share book value appreciated by 18.2%, but was outperformed by the S&P 500 index.
Historically, Mr. Buffett’s company performs better than S&P when the index declines or increases moderately, but does not do as well in a strong market.
So far this year, the company’s Class A shares have beaten the S&P 500 as well as the Dow Jones industrial average, rising by 13%.
Warren Buffett has moved from 4th to 3rd place during the last week.
In October 2006, Berkshire Hathaway A shares hit the $100k mark. Since then the more than 100% gain far exceeds S&P’s 43% gain over the same period.
Forbe’s Real-Time Billionaires ranking estimates Mr. Buffett’s fortune is now worth $65.9 billion, making him the third wealthiest individual in the world, behind Bill Gates and Carlos Slim.
Q2 profit up 41%
In the second quarter of 2014, Mr. Buffett’s company posted a 41% increase in profit to $6.395 billion, ahead of most analysts’ forecasts.
The US economic rebound boosted Berkshire’s stock portfolio.
Most of Berkshire’s businesses are based in the US. With the economy posting strong GDP growth in Q2, Mr. Buffett will stand to benefit.
Based in Omaha, Nebraska, Berkshire Hathaway Inc. employs more than 300,000 workers.
