Berkshire Hathaway’s (NYSE:BRK-A) Class A stock closed above $500,000, an all-time high, as the holding company controlled by Warren Buffett continues to load up on shares of oil companies.
In a rare move, Berkshire Hathaway’s stock has landed on Yahoo’s top trending tickers list after BRK-A shares gained 1.3% yesterday, rising for a fourth consecutive day. Shares ended up closing at $504,400, their first-ever close above the $500,000 mark.
Shares of the Omaha-based holding company have rallied more than 11% this year, significantly outperforming the S&P 500. The rally has pushed Berkshire’s market capitalization above $730 billion, surpassing that of Meta Platforms (NASDAQ:FB).
What Happened With BRK-A Stock?
Berkshire’s Class A shares have been rising for several reasons. The most immediate is that it continues to buy stock of major oil producers such as Occidental Petroleum (NYSE:OXY) and Chevron (NYSE:CVX) at a time when oil prices are at multi-year highs. In fact, Berkshire Hathaway purchased an additional 18.1 million shares of OXY stock earlier this week, bringing its stake in the oil giant to 136.4 million shares. This ultimately means its position is worth more than $7 billion.
Throughout last fall, Berkshire Hathaway also increased its stake in Chevron, bringing its stake in CVX stock to 38 million shares worth about $5.2 billion.
The energy buys come as Russia’s invasion of Ukraine pushes oil prices above $100 a barrel, their highest level since 2014. OXY stock is up more than 90% this year, while CVX stock has risen 32% year to date.
In addition to its heavy buying of oil companies, Berkshire Hathaway’s stock has also risen following a strong fourth-quarter earnings print. Its operating earnings jumped 45% year over year.
Why It Matters
The rise in Berkshire Hathaway’s share price is further evidence of the investing acumen of Warren Buffett. In addition to oil stocks, several other of his stock holdings are paying off for Berkshire Hathaway, notably the holding company’s big bet on Apple (NASDAQ:AAPL).
In addition to its Class A stock, Berkshire issued convertible Class B shares (NYSE: BRK.B) in 1996 that trade for one-thirtieth of the Class A share price. Berkshire’s Class B shares closed at $336.11 yesterday, rising 12% this year.
What’s Next
Many investors love Berkshire Hathaway’s stock and have developed an almost cult-like devotion to the company and Warren Buffett. It has proven to be a great investment over the years, having gained 7,000% since 1990. And while the Class A stock that is now trading above $500,000 is unaffordable for most investors, the Class B shares are certainly worth owning. In the near term and beyond, Berkshire Hathaway remains a safe bet.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
