Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) is the best investment for anyone seeking to benefit from a housing-market rebound, according to Joshua Brown, a vice president at Fusion Analytics Research Partners LLC.
The CHART OF THE DAY tracks Berkshire’s Class B stock, which Brown owns for clients of his New York-based firm. He cited the holding in a posting on his Reformed Broker website yesterday, when the Commerce Department reported that new U.S. homes were started at the fastest pace in about four years.
Class B shares have risen 30 percent from last year’s low, set on Sept. 22. The shares are 3.1 percent away from the highest price since October 2008, before the financial crisis reduced the value of equity investments and derivative contracts owned by Berkshire.
“It’s got the safety of a well-diversified business and it hits the housing market from virtually every angle,” Brown said in the posting. The Omaha, Nebraska-based company owns insurers, a food distributor, a railroad and a utility, among other units.
Berkshire’s holdings in Wells Fargo & Co., the largest U.S. mortgage lender, and other banks are among the investments that stand to benefit from a homebuilding recovery, the posting said. Buffett’s company owns a more than $13 billion stake in Wells Fargo, second to Coca-Cola Co. among its largest holdings.
Several Berkshire units are also poised to gain, Brown wrote. Benjamin Moore & Co., a paint maker; Johns Manville, a maker of insulation and roofing materials; and Shaw Industries Group Inc., a carpet producer, are among them. They are part of a group that generated 17 percent of first-quarter revenue.
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