Wednesday, July 18, 2012

Buffett’s Berkshire seen as best housing pick

 Warren Buffett’s Berkshire Hathaway Inc. is the best investment for anyone seeking to benefit from a
housing-market rebound, according to Joshua Brown, a vice president at Fusion Analytics Research Partners LLC.
     Class B shares have risen 30 percent from last year’s low,  set on Sept. 22. The shares are 3.1 percent away from the highest price since October 2008, before the financial crisis reduced the value of equity investments and derivative contracts owned by Berkshire.

It’s got the safety of a well-diversified business and it hits the housing market from virtually every angle. The Omaha, Nebraska-based company owns insurers, a food distributor, a railroad and a utility, among other units.

     Berkshire’s holdings in Wells Fargo & Co., the largest U.S. mortgage lender, and other banks are among the investments that stand to benefit from a homebuilding recovery.

Buffett’s company owns a more than $13 billion stake in Wells Fargo, second to Coca-Cola Co. among its largest holdings.

     Several Berkshire units are also poised to gain. Benjamin Moore & Co., a paint maker; Johns Manville, a maker of insulation and roofing materials; and Shaw Industries Group Inc., a carpet producer, are among them. They are part of a group that generated 17 percent of first-quarter revenue.

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