Most are familiar with financial giant Berkshire Hathaway ($BRK.B). It’s been making a particular splash this week, selling huge quantities of Bank of America (BAC) stock and getting a lot of people worried. So, how much cash is Berkshire Hathaway quietly sitting on right now? The answer will likely stun you, and it’s left investors concerned, as they sent shares down fractionally in Friday afternoon’s trading. The latest reports suggest that Berkshire may be sitting on a cash hoard of over $200 billion, thanks in large part to its recent selling spree.
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This is a new record for the company, which surpassed the previous record of $189 billion. Reports suggest that Warren Buffett—the man basically behind Berkshire Hathaway—is growing concerned that the bull market has been going on too hard for too long and could be in line for a correction. Thus, he’s taking cash off the line and parking it off to the side to wait out a potential upcoming storm before coming back in to bargain hunt.
A Look Under the Hood
Berkshire’s portfolio may seem like the stuff of legends, but a look at it details that there’s nothing particularly esoteric going on in there. The only thing particularly unusual about it is its sheer size. Major names like Bank of America are there—as we know from the recent sell-off—but so too are Apple (AAPL) and Chevron (CVX). Just a handful of stocks, including these three, make up nearly 75% of Berkshire’s entire portfolio.
And there are signs that Buffett is looking to move further into an S&P 500 index fund. That’s currently his top recommendation for investors, thanks to its diversity and historical performance.
Is Berkshire Hathaway a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BRK.B stock based on three Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 20.97% rally in its share price over the past year, the average BRK.B price target of $469.25 per share implies 9.8% upside potential.
