Berkshire Hathaway's Stock Portfolio Is Worth About 3 Times What It Paid. The Gains Alone Equal About 19% of the Company.
Berkshire's capital gains on investments it sells work like the typical investor's capital gains taxes do. Just don't expect to notice it if you're a shareholder.
Berkshire Hathaway's stock portfolio is currently valued at approximately three times the amount it paid for these investments. This equates to unrealized net gains of around 19% of the company's total value. As a C corporation, Berkshire Hathaway taxes its stock holdings much like an individual investor would, with capital gains taxes incurred when assets are sold.
The conglomerate holds $323.8 billion worth of individual stocks, including Coca-Cola, Apple, and American Express, which it purchased for $106.5 billion over the years. This leaves a significant tax liability on Berkshire's books, but shareholders likely won't notice it when the time comes to sell. Despite the large unrealized gains, Berkshire's total market capitalization is around $1.1 trillion.
The remaining $828.7 billion in market valuation comes from the perceived value of all privately owned businesses in the Berkshire Hathaway family, which is on track to generate $48 billion in operating earnings this fiscal year. These businesses, such as Clayton Homes, GEICO, Duracell, and Dairy Queen, may still be undervalued by the market despite modest profit-growth rates.
Berkshire Hathaway has recently sold out several positions, but unrealized net gains have been substantial in the past as well.
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