Berkshire Hathaway could be the "perfect stock" to own for 2012, Cramer said Thursday, but many investors don’t realize its worth because it’s so hard to analyze.
The Omaha, Neb.-based company is engaged in everything from insurance and chemicals to railroads and utilities. Berkshire Hathaway is spread across multiple sectors, so it gets little sponsorship on Wall Street, where the average analyst concentrates on a single sector. It’s hard for investors to follow, too, Cramer said, making it under-owned.
Cramer thinks investors should own Berkshire Hathaway, though, because each of its component parts is doing well right now. Its railroad segment, for example, is doing OK and could save a lot of money if it ever decided to switch its trains from diesel to natural gas. Speaking of nat gas, Berkshire’s pipeline business is going strong. The carpeting and paint businesses, by way of Shaw Floors and Benjamin Moore respectively, are also showing strength.
Berkshire is first and foremost an insurance company, owning Geico for auto insurance and General Re for re-insurance, as well as a medical malpractice insurance segment. The insurance group is having a “renaissance,” Cramer said, because, in part, premiums are going up. Big storms and catastrophes around the world have allowed insurance companies the ability to raise premiums.
To Cramer, CEO Warren Buffett is credited for Berkshire’s success.
“Warren Buffett isn’t just an oracle, he’s a wizard," Cramer said. "With the turn in housing, the strength in the rails, the bull market in chemicals and the insurance renaissance, Berkshire Hathaway’s just too good to ignore, even as it seems to be ignored by everyone.
“I think it’s a screaming buy at these levels.”
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