Berkshire Hathaway’s operating profit peaked in the third quarter, pushing the conglomerate’s 2019 net income to “a staggering $52 billion, making Berkshire the most profitable public company in the world.” This according to an article in Bloomberg.
The article notes that Buffett also “has more cash than ever to play with: $128 billion. That’s the record which has Berkshire’s stock languishing as investors grapple with a question amid all the superlatives: what comes next?”
CFRA analyst Cathy Seifert likens the situation to an “embarrassment of riches,” adding, “That cash might be burning a hole in their pocket and it’s prudent for them to be careful, but at some point, it almost becomes a burden to the extent that it’s going to drag down their overall returns.”
The article explains that Berkshire’s earnings record was boosted by record profits at BNSF railroad, Buffett’s biggest-ever acquisition.
While Buffett has said that the immediate outlook for buying businesses isn’t good given “sky-high” prices, the article notes that he is still on the lookout for an “elephant-sized” acquisition. That said, it adds that he has been able to “put some money to work in the stock market,” and has “snapped up shares of JPMorgan Chase & Co. and Apple Inc. One of Buffett’s investing deputies even purchased shares of Amazon.com Inc. this year. But there are limited stocks that even have the potential to move the needle.”