CB - Chubb: Berkshire Is Right To Buy This Great Company At A Good Price
2024-05-16 11:20:35 ET
Summary
- Berkshire Hathaway has taken a significant stake in Chubb stock, causing shares to surge over 6%.
- Chubb's Q1 results were strong, with adjusted EPS beating expectations and net written premiums increasing by 14.1%.
- The insurance industry's pricing environment is favorable, with Chubb's premium growth driven by raising prices rather than taking on more risk.
- Rates staying higher for longer means that investment income is likely to rise into 2025.
- At less than 12x earnings, Chubb is a "great company at a good price."
Shares of Chubb Limited ( CB ) surged over 6% on Thursday on news that Berkshire Hathaway Inc. ( BRK.A , BRK.B ) has taken a $ 6.7 billion stake in the insurer. These gains add to what has been a solid year for the insurance giant, with shares now up over 26%. I have been bullish on Chubb, most recently rating shares a "Buy" in March . With today's rally, the stock is up about 3% since this recommendation, vs. the market's 1% gain. While shares have rallied substantially, I remain bullish given strong financial results and a favorable environment....
Chubb: Berkshire Is Right To Buy This Great Company At A Good Price