Chubb (CB) stock is trading comfortably higher Thursday on news Warren Buffett's Berkshire Hathaway (BRK.B) holding company built a new position in the insurance firm.
In the most recent Securities and Exchange Commission (SEC) Form 13-F filing that revealed all the stocks Buffett is buying and selling, released late Wednesday, Berkshire Hathaway disclosed that it bought 25.9 million CB shares. This was worth a market value of roughly $6.7 billion as of March 31, 2024, or a 6.1% stake in the company.
Berkshire Hathaway began buying Chubb shares in the third quarter of 2023 and received permission from regulators to keep the holding confidential until it was done building its stake, according to CNBC.
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At the end of Q1 2024, Chubb was the ninth largest position in the Berkshire Hathaway equity portfolio, with a 2.0% weight.
The property and casualty insurer fits well within the Berkshire wheelhouse. Not only is Berkshire the parent company of insurance firms GEICO and Alleghany, but there are several large-cap financial stocks included in the equity portfolio, such as Bank of America (BAC) and Aon (AON).
The news of Berkshire's position in Chubb comes just weeks after the holding company's annual meeting, where Buffett said it reduced its stake in Apple (AAPL) by 13%. Even after this reduction Apple is still Berkshire's largest position, representing about 40% of the portfolio at the end of Q1 2024.
Where does Chubb stand with analysts?
Analysts are positive on the insurance giant. According to S&P Global Market Intelligence, the consensus analyst target price for CB stock is $268.36, representing implied upside of more than 2% to current levels. Meanwhile, the consensus recommendation is Buy.
Independent research firm Argus Research is one of the more bullish outfits on Chubb stock with a Buy rating and a recently increased price target.
"A provider of property and casualty and health/life insurance, as well as reinsurance, Chubb benefits from a strong brand, an experienced management team, and a healthy balance sheet," Argus said in a May 10 report. "We are raising our target price to $280 from $270."
The $280 price target represents implied upside of about 7% to current levels.
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