Stock of the Week: Berkshire Hathaway (BRK.B)

December 15, 2014 — 08:44 am EST

Written by Marc Chaikin ->

Berkshire Hathaway (BRK-B) is a holding company that owns a diversified portfolio of operating businesses such as Benjamin Moore Paints, Burlington Northern, H.J. Heinz, Johns Manville and Lubrizol. It also has minority investments in blue chip companies like American Express (AXP), Coca-Cola (KO) and IBM (IBM) and most importantly owns a series of cash flow generating insurance companies such as GEICO, General RE and Wesco Financial. Led by legendary investor Warren Buffett, BRK.B has a bullish Chaikin Power Gauge stock rating and is one of the strongest performers in the very strong Insurance group.

Berkshire Hathaway is one of the 60 stocks in the NASDAQ Chaikin Power U.S. Large Cap Stock Index (NQULCHK), which was launched in April of 2014. With the NQULCHK beating its benchmark NASDAQ 300 Large Cap Index by over 300 basis points, BRK.B has been leading both the NASDAQ Chaikin Power Large Cap Index as well as the S&P 500 Index with a gain of 17% since April 1st vs. a 7% gain in the S&P 500.

BRK.B has been a prime beneficiary of an accelerating U.S. economy, with corporate profits at record levels. It triggered an Oversold Buy signal in Chaikin Analytics on Friday as Berkshire sold off in sympathy with the overall stock market. Berkshire has a very bullish Chaikin Power Gauge stock rating and has been outperforming the stock market since early August.

BRK.B’s very bullish Power Gauge rating is being driven by superior industry group strength, increasingly bullish analysts who are raising their earnings estimates for 2015 and strong price/volume activity.

In a market that is likely to reverse back to the upside and finish the year on a strong note, BRK.B is the perfect stock to buy to participate in a renewed market advance.