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5 Financial Stocks that Crushed Berkshire Hathaway in 2016
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Berkshire Hathaway Inc. (BRK.B - Free Report) is one of the most sought after stocks, given that it is managed by one of the best investors of all time, Warren Buffett. No doubt, the stock had a great 2016. The company shares are up more than 25% so far this year, compared with 13.5% growth for the Zacks categorized Finance industry.
Berkshire has widely diversified operations consisting of over 60 wholly owned subsidiaries, engaged in everything from construction, furniture and insurance to banking, soft drinks and jewelry. Hence, this provides investors exposure to some of the best companies and guarantees solid returns from Berkshire.
Over the years, Buffett has remodeled Berkshire, by lowering portfolio investments in economic sensitive sectors. Today, the company is an industrial conglomerate.
This year, Buffett added several big names to his portfolio list, including Precision Castparts Corp., Duracell as well as a handful of airline stocks. Further, he increased stake in several major companies.
Notably, as of Sep 30, 2016, around 37% of Buffett’s investments were in consumer staples industry, while nearly 32% were in financial sector.
On the whole, Berkshire is reaping benefits from improving performance of the portfolio companies. As of Sep 30, 2016, this Zacks Rank #3 (Hold) company had around $85 billion in cash, which can be used for making more investments.
However, a big disadvantage for Berkshire is the absence of dividends. Despite having such a strong liquidity position, the company has avoided paying dividends since the 1960s. It has been long proven that dividend paying stocks are always preferred over stocks sans dividend.
Today we bring five Finance stocks that not only outpaced Berkshire but are expected to perform better in the coming years.
At present, the finance is one of the hot sectors, given the optimism surrounding the promises made by the President-elect Donald Trump. Also, the Fed rate hike and expectations of three more rate rises next year have added to the bullish trend.
Here are the five of the eight stocks that got shortlisted:
KeyCorp (KEY - Free Report) : The shares of this major regional bank has grown 38.9% year to date. With a market cap of $20 billion, the stock has witnessed upward estimate revisions, over the last 60 days.
Morgan Stanley (MS - Free Report) : This major Investment bank has surged 36.3% so far this year. Over the last 60 days, the stock, with a market cap of $87.5 billion has witnessed upward estimate revisions.
Alleghany Corporation : So far this year, this property and casualty stock has gained 28.9%. With a market cap of $9.4 billion, the stock has witnessed upward estimate revisions, over the last 60 days.
Zions Bancorporation (ZION - Free Report) : This Western bank’s shares have jumped 59.9%, year to date. Over the last 60 days, the stock with a market cap of $87.5 billion, has witnessed upward estimate revisions.
Citizens Financial Group, Inc. (CFG - Free Report) : This savings and loan company’s shares have grown 37.5%, so far this year. With a market cap of $18.5 billion, the stock has witnessed upward estimate revisions, over the last 60 days.
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>
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5 Financial Stocks that Crushed Berkshire Hathaway in 2016
Berkshire Hathaway Inc. (BRK.B - Free Report) is one of the most sought after stocks, given that it is managed by one of the best investors of all time, Warren Buffett. No doubt, the stock had a great 2016. The company shares are up more than 25% so far this year, compared with 13.5% growth for the Zacks categorized Finance industry.
Berkshire has widely diversified operations consisting of over 60 wholly owned subsidiaries, engaged in everything from construction, furniture and insurance to banking, soft drinks and jewelry. Hence, this provides investors exposure to some of the best companies and guarantees solid returns from Berkshire.
Over the years, Buffett has remodeled Berkshire, by lowering portfolio investments in economic sensitive sectors. Today, the company is an industrial conglomerate.
This year, Buffett added several big names to his portfolio list, including Precision Castparts Corp., Duracell as well as a handful of airline stocks. Further, he increased stake in several major companies.
Notably, as of Sep 30, 2016, around 37% of Buffett’s investments were in consumer staples industry, while nearly 32% were in financial sector.
On the whole, Berkshire is reaping benefits from improving performance of the portfolio companies. As of Sep 30, 2016, this Zacks Rank #3 (Hold) company had around $85 billion in cash, which can be used for making more investments.
However, a big disadvantage for Berkshire is the absence of dividends. Despite having such a strong liquidity position, the company has avoided paying dividends since the 1960s. It has been long proven that dividend paying stocks are always preferred over stocks sans dividend.
(Looking for the Best Stocks for 2017? Be among the first to see our Top Ten Stocks for 2017 portfolio here.)
5 Financial Stocks that Outperformed Berkshire
Today we bring five Finance stocks that not only outpaced Berkshire but are expected to perform better in the coming years.
At present, the finance is one of the hot sectors, given the optimism surrounding the promises made by the President-elect Donald Trump. Also, the Fed rate hike and expectations of three more rate rises next year have added to the bullish trend.
We have taken the help of Zacks Stock Screener to pick finance stocks that outpaced Berkshire this year. Apart from that, these stocks have market cap of $5 billion or more and sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are the five of the eight stocks that got shortlisted:
KeyCorp (KEY - Free Report) : The shares of this major regional bank has grown 38.9% year to date. With a market cap of $20 billion, the stock has witnessed upward estimate revisions, over the last 60 days.
Morgan Stanley (MS - Free Report) : This major Investment bank has surged 36.3% so far this year. Over the last 60 days, the stock, with a market cap of $87.5 billion has witnessed upward estimate revisions.
Alleghany Corporation : So far this year, this property and casualty stock has gained 28.9%. With a market cap of $9.4 billion, the stock has witnessed upward estimate revisions, over the last 60 days.
Zions Bancorporation (ZION - Free Report) : This Western bank’s shares have jumped 59.9%, year to date. Over the last 60 days, the stock with a market cap of $87.5 billion, has witnessed upward estimate revisions.
Citizens Financial Group, Inc. (CFG - Free Report) : This savings and loan company’s shares have grown 37.5%, so far this year. With a market cap of $18.5 billion, the stock has witnessed upward estimate revisions, over the last 60 days.
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>