Berkshire Hathaway shares rallied to an eight-month high this week, and there could be more gains ahead if they continue to catch up to the S&P 500.
The B shares closed Tuesday at $512.37, their highest level since November 28, when they finished at $513.81.
They closed Friday at $511.54, down 5.2% from the all-time closing high of $539.80 on May 2 of last year, the day before Warren Buffett revealed he would step down as CEO at the end of 2025.
The Class A shares ended Tuesday at $768,010, also their highest close since November 28's $770,100.
Friday's close of $766,600 was 5.3% below their all-time closing high of $809,350.
A story in Barron's says Berkshire's rally "has room to run" since the stock remains "well behind" the benchmark S&P 500, which is 7.6 percentage points ahead.
But Berkshire has erased more than half of its 17.5 percentage point deficit just two months ago.
Berkshire is also lagging behind competitors in two key sectors: railroads and insurance.
Another positive for Berkshire is the big gains for three of its biggest equity portfolio holdings.
Number one Apple, now worth more than $70 billion, is up 13.6% so far this year.
Coca-Cola, Berkshire's third largest position at $35 billion, has jumped 25% year-to-date. Earnings this week came in ahead of expectations and Coke raised its full-year outlook.
Number four Bank of America is up 12.6% on the year. That stake is now valued at almost $32 billion.
Berkshire's gain of around 3% on Tuesday may have been partially fueled by UBS analyst Brian Meredith raising his price target on the B shares to $585 from $570, and on the A shares to $877,848 from $854,596.
While maintaining a "buy" rating, Meredith also edged his earnings estimates higher and welcomed a Barron's report two weeks ago that Berkshire appeared to have bought back as much as $11 billion of its stock in the second quarter.
We'll get the actual number when Berkshire releases second-quarter results, expected on Saturday, August 8.
