Stock Analysis | Berkshire Hathaway B Outlook - Weak Technicals and Mixed Fundamentals Amid Strong Fund Flows

Market Snapshot

Headline takeaway: Berkshire Hathaway B (BRK.B) is currently showing a weak technical profile with bearish signals outweighing the bullish, while fundamentals remain mixed. However, recent fund flows indicate positive inflows across all investor categories.

News Highlights

Recent news affecting the broader market includes significant changes to U.S. Covid-19 vaccine policies under Secretary Robert F. Kennedy Jr., which could influence public health spending and indirectly impact financial markets.

• Reliable Data Services reported strong sales growth in May, but rising costs are creating concerns about long-term profitability. This highlights the broader trend of businesses growing revenue amid inflationary pressures.
• REX Shares filed for Ethereum and Solana ETFs, using a new C-corp structure to navigate SEC staking guidelines. This could signal growing institutional interest in crypto markets.

Analyst Views & Fundamentals

Analysts have been optimistic about BRK.B, with a simple average rating of 5.00 and a performance-weighted historical rating of 4.86. The ratings have been consistent recently, with all two recent analyst ratings from UBS being “Strong Buy.” This aligns with a current price rise of 2.20%, suggesting positive sentiment.

However, the fundamentals show mixed signals. Key factors include:

• Total operating revenue (YoY growth rate): -12.94% – Internal diagnostic score: 3
• Diluted earnings per share (YoY growth rate): -60.58% – Internal diagnostic score: 1
• Net profit margin: -3825.61% – Internal diagnostic score: 0
• Net cash flow from operating activities (YoY growth rate): -13.16% – Internal diagnostic score: 3

Money-Flow Trends

Recent fund-flow patterns suggest positive inflows across all investor sizes. While the overall trend is negative in terms of directional momentum, the inflow ratios are above 48% across all categories, showing strong institutional and retail interest:

• Small investors are showing the most positive trend with a 53.67% inflow ratio
• Extra-large investors are also showing a strong 48.73% inflow ratio
• Block traders show a moderate 48.53% inflow ratio, indicating continued accumulation in the name.

Key Technical Signals

Technically, BRK.B is showing weak signals with 3 bearish indicators and only 1 bullish one, leading to a technical score of 3.48. The overall trend is described as weak, and the market is advised to avoid the stock at this time.

• Bullish Engulfing: Internal diagnostic score: 7.89 – the strongest positive signal, but insufficient to offset bearish patterns.
• Marubozu White: Internal diagnostic score: 2.31 – a neutral to bearish signal.
• WR Overbought: Internal diagnostic score: 2.27 – suggests overbought conditions with low win rate.
• RSI Overbought: Internal diagnostic score: 1.45 – a clear bearish signal with historically poor returns.

Recent chart patterns include WR Overbought and RSI Overbought signals from August 28 to September 4, indicating continued pressure on the stock in recent weeks.

Conclusion

Despite strong fund-flow inflows and positive analyst sentiment, the technical profile of Berkshire Hathaway B remains weak. With 3 out of 4 recent indicators leaning bearish and a low internal diagnostic score of 3.48, it may be wise for investors to wait for a pull-back before considering new entry points.

Actionable takeaway: Consider waiting for a clearer positive technical setup, or monitor upcoming earnings and broader market sentiment for potential reversal cues.