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Berkshire Hathaway Inc Stock Downgraded (BRK.A)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Berkshire Hathaway (NYSE: BRK.A) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including premium valuation and poor profit margins.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • Since the same quarter one year prior, revenues rose by 15.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $6,856.00 million or 41.09% when compared to the same quarter last year.
  • BERKSHIRE HATHAWAY has improved earnings per share by 47.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BERKSHIRE HATHAWAY increased its bottom line by earning $5.98 versus $4.14 in the prior year. This year, the market expects an improvement in earnings ($9315.55 versus $5.98).
  • The gross profit margin for BERKSHIRE HATHAWAY is rather low; currently it is at 20.36%. Regardless of BRK.A's low profit margin, it has managed to increase from the same period last year.

Berkshire Hathaway, Inc. is a publicly owned investment manager. Through its subsidiaries, the firm primarily engages in the insurance and reinsurance of property and casualty risks business. Berkshire Hathaway was founded in 1889 and is based in Omaha, Nebraska. Berkshire Hathaway has a market cap of $148.33 billion and is part of the financial sector and insurance industry. Shares are up 28.5% year to date as of the close of trading on Friday.

You can view the full Berkshire Hathaway Ratings Report or get investment ideas from our investment research center.

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