Zacks Analyst Blog Berkshire Hathaway, Canadian Pacific Kansas City, American International and Steel Partners

For immediate releases

Chicago, IL – October 11, 2024 – Zacks.com announces the list of stocks featured on the Analyst Blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured on the blog include Berkshire Hathaway Inc. (BRK.B), Canadian Pacific Kansas City Ltd. CP, American International Group, Inc.

Here are the highlights from Friday’s Analyst Blog:

Top Analyst Reports for Berkshire Hathaway, Canadian Pacific and AIG

Zacks Research Daily features the best research results from our team of analysts. Today’s Research Daily features new research reports on 12 top stocks, including Berkshire Hathaway Inc., Canadian Pacific Kansas City Ltd. and research content on these small, under-the-radar companies is the only research of its kind in the country.

These research reports were handpicked from around 70 reports published today by our team of analysts.

You can See all of today’s research reports here >>>

Berkshire Hathaway the stock has outperformed the Zacks Insurance – Property & Casualty industry year-to-date (+27.8% vs. +26.7%). The company is one of the largest property and casualty insurers with numerous diverse business activities. A strong cash position supports complementary acquisitions that increase profits and is indicative of your financial flexibility.

Continuous growth of the insurance business fuels an increase in float, boosts profits and generates maximum return on equity. Non-insurance businesses have also performed well in recent years. The addition of Pilot Travel Centers (PTC) has strengthened its energy business. A robust capital level provides an additional boost.

However, exposure to catastrophic losses induces earnings volatility and also affects underwriting results. Huge capital expenditure remains a hurdle. With the passing of Charles Munger, uncertainty hangs over the company’s performance.

(You can read the full Berkshire Hathaway research report here >>>)

Actions of Canadian Pacific outperformed the Zacks Transportation – Rail industry year-to-date (+2.3% vs. -1.4%). Following the approval of the merger with Kansas City Southern, the company is known as Canadian Pacific Kansas City Ltd. The deal is expected to attract synergies (annually) of $1 billion over three years.

The merged entity began offering daily premium intermodal service between the U.S. Midwest and Mexico. We are impressed with Canadian Pacific Kansas City’s efforts to reward its shareholders through dividends and share repurchases.

On the other hand, high operating expenses continue to weigh on the company’s results. The positivity surrounding the stock is evident from the fact that the Zacks Consensus Estimate for current year earnings has been revised upward over the past 60 days. Given the positives surrounding the stock, investors would do well to bet on it at current levels.

(You can read the full Canadian Pacific research report here >>>)

American International shares have gained +13.3% year-to-date versus the Zacks Insurance – Multi line industry gain of +20.4%. The company’s cost-cutting efforts are driving operational efficiency, helping margins. It continues to make divestments to rationalize its operations, focus on the General Insurance unit and reduce portfolio volatility.

American International’s robust cash generation capacity has allowed it to continue to increase shareholder value through share repurchases and dividend payments. Its FCF has increased 5.4% over the past 12 months.

However, the deterioration in the North American Commercial Lines combined index is a headwind. Its net debt in relation to capital is higher than that of the industry. Furthermore, its ROE of 9.52% is lower than the industry average of 16.09%, reflecting the inefficiency in the use of shareholder funds. As such, the action warrants a cautious stance.

(You can read the full research report on American International here >>>)

Actions of Steel Partners have gained +4.1% over the past six months versus the Zacks Diversified Operations industry gain of +15.2%. This microcap company with a market capitalization of $808.39 million reported strong financial results in the second quarter of 2024, with revenues growing 6.4% year over year to $533.2 million and a 113.2% increase in net profit to US$124.9 million.

Revenues for the six months ending June 30, 2024 also increased 6.7% to $1 billion. This growth reflects the company’s effective diversification in its industrial and financial services segments. SPLP’s operational efficiency is highlighted by an adjusted EBITDA margin of 15.7%, up from 14.7% in the second quarter of 2023.

The company’s balance sheet is robust, with $256.4 million in cash and a debt reduction of $112 million in the first half of 2024, improving financial stability. Investments in the Supply Chain segment, which recorded 192% in revenue in the six months ending June 30, 2024, position SPLP for long-term growth, especially as global supply chains evolve.

(You can read the full Steel Partners research report here >>>)

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is provided for informational purposes only and nothing contained herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in identified and described securities, companies, sectors or markets have been or will be profitable. All information is current as of the date of this document and is subject to change without notice. Any views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making, or asset management activities for any securities. These returns come from hypothetical portfolios composed of stocks with a Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of real stock portfolios. The S&P 500 is an unmanaged index. Please visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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