Slow and Steady Earnings Growth Will Win the Investment Race

Investing is a marathon, although with all the day-to-day news and quarterly earnings report, it may not always feel like that. A handful of companies get their focus right, looking at the long haul versus short-term moves.

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  • Those companies may not always please investors during their quarterly earnings reports. But all companies will have a disappointing quarter from time to time. Great companies don’t let it faze them at all.

    Conglomerate Berkshire Hathaway (BRK-B) is one such company. A mix of fully-owned businesses and insurance operations, the company can have wildly mixed returns. Part of that can come from changing asset valuations, including the company’s stock portfolio.

    The most recent earnings report beat, in part due to the increased value of the company’s holdings. While some investors noted a slowdown in the company’s share buyback, it simply follows the company’s long-term view of not overpaying for assets, including its own shares.

    Action to take: Investors may like shares for the long haul at current prices, and look to add shares on any sizeable market dip. While Berkshire doesn’t pay a dividend yet, its steady growth over time still offers a return slightly better than the average on the S&P 500.

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  • For traders, shares are likely to trend higher over time. The December $375 calls, last going for about $10.60, could see mid-double-digit returns to leverage a rally in shares in the back half of the year.


    Disclosure: The author of this article has a position in the company mentioned here, but does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.


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