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Warren Buffett, who has already become a legend of the financial markets in his lifetime, has announced that his adventure as Chairman of Berkshire Hathaway will end with 2025, with Canadian energy industry expert Greg Abel as his replacement. The new helmsman of the investment vehicle will have a lot of room for manoeuvre, especially considering that the last few months have been marked by cash accumulation, which according to the latest F13 report stands at $344 billion. It is very possible that the strategy of accumulation and holding free cash in anticipation of a discount will be maintained, especially since Buffett’s popular index measuring the ratio of the value of US publicly traded companies to US GDP is hitting new records and currently stands at 218%. Today’s analysis will suggest three of the most interesting companies in Berkshire Hathaway’s current portfolio before the “Oracle of Omaha” retires.
1. Bank of America – High Fair Value and a Chance to Catch a Correction
Of today’s list, it is Bank of America Corp (NYSE:) that has the largest percentage of Buffett’s portfolio at 11.1%. BofA primarily boasts a high fair value, as measured by the InvestingPro index, of just under 25% and an ongoing uptrend, where a corrective phase is possible to develop. The downward start of this week brings the supply side closer to attacking support in the area of the round $50 barrier, set on the basis of previous historical peaks in confluence with the accelerated uptrend line. Not much lower lies another important level at $48 per share.
Figure 1: Technical analysis of Bank of America
The further direction of the stock price will be significantly influenced by quarterly results, which will be announced on October 15.
2. Chubb Ltd – Solid Fundamentals and a Chance to Develop Growth
Chubb Ltd (NYSE:) is a Swiss insurance company, which currently represents a 3% stake in the portfolio. In addition to a fair value at a decent 12.6%, the company boasts a strong InvestingPro financial health score, confirming the Swiss insurer’s financial stability.
The company may also be attractive from the point of view of defensive portfolios geared to, among other things, reaping dividends. This is confirmed by the company’s history of sharing earnings with investors, which has been growing consistently over the past nine years.
Figure 2: Chubb Ltd’s dividend streak, source: InvestingPro
Quarterly results will be known at the end of this month, on which the market is moderately optimistic due to the advantage of an upward revision vs. a downward revision of 9 to 6.
3. DaVita HealthCare Partners – Several Factors Play in Favor of Buyers
Of the three selected companies, DaVita HealthCare Partners Inc (NYSE:) has the lowest percentage share at 1.9%. The company was singled out due to the confluence of several factors that may favor the demand side, among which are a stable financial position, high free cash flow profitability, and an interesting technical situation, where a double bottom formation is possible.
Figure 3: Technical analysis of DaVita HealthCare Partners
The realization of such a scenario will be possible if the support level located in the price area of $130 per share can be defended. In this case, once the local downward trend line is broken, the way is opened for an attack on the nearest resistance at $150 per share.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belongs to the investor. We also do not provide any investment advisory services.
