Berkshire Hathaway Chairman and CEO Warren Buffett.

Andrew Harnik | AP

Berkshire Hathaway Class A shares hit a major milestone on Wednesday, hitting an all-time high of half a million dollars as Warren Buffett’s multi-faceted conglomerate fired every cylinder during the economic recovery.

Class A shares gained 1.3% on Wednesday, rising for the fourth day in a row to close at $504,400 – the first-ever close above the half-million dollar threshold. Shares of the Omaha-based company are up more than 11% this year, significantly outperforming the broader market.

“I think a rotation in value names, coupled with Berkshire’s exposure to the energy and utilities sector…and investor enthusiasm for Berkshire’s aggressive share buybacks, has boosted the stock’s performance,” said Cathy Seifert, a Berkshire Analyst at CFRA Research.

The rally in the stock pushed Berkshire’s market cap above $730 billion, surpassing tech pioneer Meta Platforms in market value and becoming the only non-tech companies on the list of the 10 most valuable US publicly traded companies.

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Berkshire’s Class A shares are the conglomerate’s original offering, which quickly rose in price over time to eventually become one of the most expensive single stocks on Wall Street. Buffett has said he will never split Class A shares because he believes the high share price will retain and attract more long-term, quality-oriented investors.

Still, in response to consumer demand for a cheaper option, Berkshire issued Class B convertibles in 1996 for one-thirtieth the initial price of Class A shares. The Affordable Share Class allows investors to buy a portion of the company directly instead of buying a fraction of a share through mutual funds or mutual funds.

Berkshire’s Class B shares closed Wednesday at $336.11 apiece, up a comparable 12% this year.

The company’s operating income — which includes profits made from the conglomerate’s numerous businesses, such as insurance, rail and utilities — rose 45% in the fourth quarter from a year ago as businesses came to life due to the pandemic economic slowdown.

A slew of Buffett’s stock ownership is paying off, from Apple to major banks and Japanese trading houses. The 91-year-old investment legend’s massive bet on Apple, which makes up 40% of Berkshire’s stock portfolio, has yielded more than $120 billion on paper.

Meanwhile, Berkshire has further supported the stock by buying back a record $27 billion in its own shares in 2021, as the Oracle of Omaha found few opportunities externally. The conglomerate has not made any major acquisitions in recent years, so it has consistently bought back its own shares with its huge cash pile.

This post Berkshire Hathaway closes at a record over $500,000 a share as Buffett’s conglomerate roars back

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