Since Warren Buffett announced his departure from Berkshire Hathaway last May, its shares have underperformed markets dramatically. Investors worry about an irreplaceable loss, but the latest earnings rose by 17% year over year, showing the business has formidable advantages. Despite underperformance, the company remains strong with potential for growth.

Buffett’s departure has seen Berkshire Hathaway shares fall 10% since May, while the S&P 500 rallied 22%, creating a significant performance gap. Speculation on the loss of the “Buffett premium” has impacted investor confidence, but the company’s fundamentals and diverse portfolio offer stability and growth potential.

Berkshire Hathaway’s “secret sauce” includes investments like American Express and Coca-Cola, which have consistently raised dividends, providing substantial returns. Holdings in Visa, Mastercard, and Apple continue to deliver strong results, showcasing the company’s ability to generate wealth regardless of management changes.

The conglomerate’s insurance business is a key driver of growth, with the float increasing from $88 billion to $171 billion, allowing Berkshire to invest for free and keep 100% of profits. Investments in U.S. Treasuries provide stable returns, contributing to the company’s financial strength and future stability.

Despite Buffett’s departure, Berkshire Hathaway remains undervalued, trading at a 50% discount compared to the average S&P 500 company. With recent earnings growth of 17.3% and a strong portfolio of dividend-yielding assets, the company is positioned for continued success under new management, offering a compelling investment opportunity.

Read more at Nasdaq: 3 Reasons Berkshire Hathaway Can Thrive in Its Post-Buffett Era