Business Corpus: Berkshire Hathaway Stock Nears Buy Point Amid This Trio Of CatalystsBerkshire Hathaway shares are at their highest level in nearly six months, as strong earnings help Warren Buffett build a cash pile for Apple stock purchases, buybacks and acquisitions. The post Berkshire Hathaway Stock Nears Buy Point Amid This Trio Of Catalysts appeared first on Investor's Business Daily.

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Berkshire Hathaway (BRKB) shares are at their highest level in nearly six months, as strong earnings help Warren Buffett build a cash pile that he can use for Apple (AAPL) stock purchases, buybacks and acquisitions.

Berkshire Hathaway stock gapped up on quarterly earnings a month ago — and it continues to hold above the 10-day moving average while the broad market wobbles.

Class B shares edged up 0.1% to 212.42 in Thursday's stock market trading, putting them within 2% of a 217.72 buy point.

But while the stock has had a nice post-earnings run, the RS line shows a more modest gain and is well off its consolidation high. The RS line tracks a stock's performance vs. the S&P 500 index.

Berkshire Hathaway Catalyst #1: Soaring Profits

Berkshire's latest quarterly report underscored broad strength across many of its business segments. The conglomerate reported June-quarter operating profits soared 67%, to $4,190 per Class A share.

Insurance earnings starred in the results, but earnings in the Burlington Northern railroad, manufacturing, service, retail and financial segments also topped expectations, according to analyst Sarah DeWitt of JPMorgan.

"Strong 2Q results at Berkshire reinforce our positive outlook," DeWitt wrote in an Aug. 6 note to clients, per CNBC.

Analysts have raised 2018 and 2019 earnings estimates, according to Zacks.

CFRA estimates operating EPS of $9.73 in 2018 and $9.95 in 2019, ramping up from $5.86 in 2017.

But the research firm has a hold opinion on the shares, saying Berkshire's premium valuation depends on its ability to produce above-average revenue growth and profit margins, which it did not meet in 2017.

Berkshire Hathaway Catalyst #2: Cash Pile

Berkshire's cash haul has boosted hopes for acquisitions and buybacks.

Berkshire had $111.1 billion in cash and equivalents at the end of Q2, up from $109 billion at the end of Q1.

"Berkshire has grown through acquisitions and we think will continue to do so, despite a lack of any meaningful recent acquisition activity," CFRA's equity analyst Cathy Seifert wrote in a Sept. 1 note, citing the cash hoard.

The cash could also be put to use for share repurchases. Recently, Berkshire loosened its repurchase policy, allowing it to "to return part of the excess capital to shareholders while maintaining financial flexibility if attractive acquisition opportunities arise."

Still, analysts are divided on the likelihood of Berkshire share buybacks.

Berkshire Hathaway Catalyst #3: Apple

Warren Buffett keeps taking more bites of Apple. Berkshire loaded up on the iPhone maker in Q2, boosting its stake by 5%, regulatory filings showed in August.

Apple now accounts for almost a quarter of Berkshire's stock portfolio. The company is now the third-largest Apple shareholder, with its stake now worth more than $50 billion, up from $28.2 billion at year-end 2017.

The latest purchases came as Apple became the first U.S. company to reach a market value of $1 trillion.

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