March 26, 2020 Berkshire Hathaway HomeServices Acquisitions

A recent earnings report indicates Berkshire Hathaway’s expansion yields 10% growth.

Warren Buffett’s holding company’s real estate sector has seen rapid growth over the past few years. The most recent earnings report indicates that Berkshire Hathaway’s expansion is yielding positive earnings.

In his annual letter addressed to Berkshire Hathaway, the Oracle of Omaha, aka Warren Buffett, provided a glimpse of the earnings of the affiliate, HomeServices of America. The real estate brokerage firm is the second-largest in the country.

Residential real estate service provider, HomeServices of America, saw net income growth of $15 million from 2018 to 2019. An acquisition spree spanning years fueled this 10% gain. The company is a provider of mortgage loan origination, real estate brokerage, franchising, title insurance, escrow and closing, home warranties, casualty insurance, property insurance, and relocation services. There are a total of 43 brand names that operate under the real estate brokerage division.

Berkshire’s acquisitions include last year’s purchase of Prudential Florida. This is one of the organization’s many franchises. The acquisition increased its footprint in Florida by 1750 agents and 40 offices. This combines with the existing offices across the country as far as California. A Santa Monica realtor working for BH HomeServices is now part of a nationwide network of 22,000 sales associates across 28 states.

Warren Buffett is the fourth-richest person on earth, and according to Forbes, he did not drop any pearls of wisdom about the real estate business. Buffett was given his nickname due to commentary from the greater Omaha community and because of his wise investment selections.

The multinational conglomerate company that he leads, Berkshire Hathaway, is also a diversified holdings company. The number of subsidiaries owned by the company is astounding, and the stock is the most expensive one you can own. The company’s Class A shares are well over $300,000. Berkshire is one of the largest public companies in the world.

Berkshire Hathaway holds and invests in dozens of major private and publicly traded companies. Several self-titled companies are also included in their portfolio. This includes Berkshire Hathaway Direct Insurance Company and Berkshire Hathaway HomeServices of America.

The companies and holdings of Berkshire Hathaway contribute a wide range of services and commodities to the market. This includes producing and providing electronics and computers, clothing, foodservice products, automotive products and services, and insurance services.

This company primarily began in textiles, but it has grown to what is now a conglomerate with investments in a wide range of major companies. Berkshire Hathaway is the key example of Warren Buffett’s successful investing strategy.

Buffett’s 144-page income report made little mention of the brokerage. His explanation in the annual report concerning income growth was described as dry. He did report an upward move in refinancing activity. HomeServices offers title, escrow, insurance services, and mortgage.

HomeServices is a division of Berkshire Hathaway’s energy subsidiary, Berkshire Hathaway Energy. MidAmerican Energy is the former name of this division. The parent company that Buffett leads is the owner of various name brands across various industries including Fruit of the Loom, Dairy Queen, Geico, and Duracell.

A net income of over $81.4 billion was reported for 2019 with $53.7 billion being net unrealized gains in stock holdings. Buffet did report that losses were caused by a fire at a French factory operated by Lubrizol, the chemical company Berkshire Hathaway purchased in 2011 for $9 billion.

Fortunately, a large chunk of the losses are covered by the insurer, however, Buffet wittingly reported that Berkshire Hathaway owns the insurer.

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