Warren Buffett's Berkshire Hathaway stock may be overvalued, caution advised for investors

From Nasdaq: 2025-03-06 04:05:00

Warren Buffett’s Berkshire Hathaway stock has returned 19.9% annually over six decades, outperforming the S&P 500. In the fourth quarter of 2024, operating earnings increased by 71% to $14.5 billion, driven by the insurance segment. Despite a record $334 billion in cash, Buffett did not repurchase stock for two consecutive quarters, signaling it may be overvalued. Investors should monitor for a more attractive entry point as Berkshire stock trades at a high price-to-earnings ratio of 22.5 and price-to-book ratio of 1.64, above the 10-year average. Buffett’s recent decisions suggest caution in investing in Berkshire at its current valuation.



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