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) --

Warren Buffett's

Berkshire Hathaway

( BRK-B) may have seen a 43% increase in operating earnings last quarter thanks to a rally that sent

Wells Fargo

(WFC) - Get Wells Fargo & Company Report

shares soaring but that still doesn't render the stock a buy, according to an analyst.

According to an analysis by Barclays equity analyst Jay Gelb, Berkshire's top equity holdings - which included Wells Fargo, as of Sept. 30 - appear to have risen so much during the last few months of the year that operating earnings may have climbed to $1,794 per share. Gelb estimates that Berkshire's book value may have risen about 6%, with a $7.2 billion boost from its investment portfolio.

However, Berkshire's stock isn't necessarily cheap: Compared to other insurance stocks that Gelb covers, Berkshire has been trading around 1.25 times book value, vs. a median of 0.92 for competitors. However, its valuation is still below a long-term average of 1.6 times book value.

"Strong operating results are expected to continue, although we view shares of Berkshire as fairly valued," said Gelb, who rates the stock at "equal weight." He added that "long-term, we remain concerned about a lack of clarity around Warren Buffett's succession plans because we believe he is synonymous with Berkshire Hathaway."

Berkshire is the biggest holder of Wells Fargo stock, with a 6.4% stake as of Sept. 30, according to regulatory filings. The value of that investment jumped 24% during the last three months of the year, as Wells Fargo shares climbed from $25.07 to $30.99 apiece.

Wells is Berkshire Hathaway's second-biggest holding, representing 17% of its stock portfolio, behind

Coca Cola

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, which represents 24%. Coke also had a nice run-up last quarter, climbing 13% from $58.12 to $65.77 per share, even as other top holdings like

American Express

(AXP) - Get American Express Company Report


Procter & Gamble

(PG) - Get Procter & Gamble Company Report


>>>Invest like Buffett: Berkshire's portfolio at Stockpickr

Gelb expects Berkshire to continue posting "robust results" in manufacturing, service and retail business lines and suggested that the recent acquisition of the Burlington Northern railroad may also have helped lift results. He expects "stable" results from insurance and utilities, with some volatility in overall investment holdings.

In contrast to his equal weight rating of Berkshire, Gelb suggests investors overweight their holdings of a selection of insurance competitors based on valuation or other upside factors. Those include


(TRV) - Get Travelers Companies, Inc. Report


ACE Limited



Arch Capital

(ACGL) - Get Arch Capital Group Ltd. Report




. Those stocks are trading anywhere from 0.94 to 1.02 times book value, according to Gelb's analysis.

-- Written by Lauren Tara LaCapra in New York


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