BRK-B Berkshire Hathaway Inc.

Berkshire Hathaway is one of the largest companies in the world, run by legendary investor Warren Buffett. It's a conglomerate — meaning it owns a diverse collection of entirely different businesses. On the insurance side, it owns GEICO (the car insurer) and several reinsurance operations. It also owns BNSF, one of America's largest freight railroads; Berkshire Hathaway Energy, a major electric utility; and hundreds of manufacturers and retailers ranging from aerospace parts makers to furniture stores. On top of all these operating businesses, Berkshire holds a $665 billion investment portfolio dominated by major public company stocks. With 392,000 employees and $375 billion in revenue, Berkshire is enormous.

Berkshire's appeal is its combination of steady operating businesses, a massive investment cushion, and the discipline of Buffett's capital allocation. The insurance operations generate what Buffett calls "float" — money held from policyholders before claims are paid — which Berkshire invests at no cost. The railroad and energy businesses throw off reliable cash. And the investment portfolio provides upside if the underlying companies (particularly Apple, its largest holding) continue to grow.

The key risk is concentration and succession. Apple alone represents about 22% of Berkshire's equity portfolio, so a big drop in Apple's stock would hurt Berkshire meaningfully. Warren Buffett, who has run the company for 60 years, is 94 — investors have long wondered whether the company's culture and performance will persist after his eventual departure. Our model estimates fair value at roughly $531 per share, about 9% above the current price, with analysts averaging around $570.