Berkshire’s Financial Holdings Offer Value Beyond the Conglomerate
Greg Abel’s retention of key financial stakes suggests specific opportunities in American Express and Chubb based on recent operational metrics and valuation gaps.
Berkshire Hathaway’s new CEO, Greg Abel, has maintained the firm’s core investment strategy following Warren Buffett’s transition to the chairman role at the end of 2025. While recent portfolio adjustments saw the exit from payment networks like Mastercard and Visa, the holding company retains significant stakes in three major financial services firms: American Express, Chubb, and Moody’s. According to analysis from GN stocks/banks, these positions represent distinct investment opportunities that may currently offer more upside potential than the Berkshire conglomerate itself.
The rationale for this divergence lies in the specific operational drivers of each subsidiary. American Express continues to leverage its closed-loop network to capture fee revenue from high-income households, while Chubb benefits from expanding underwriting margins in the property and casualty sector. These businesses are generating robust cash flows and growth metrics that stand independently of the broader conglomerate structure, creating a valuation disconnect that investors are currently evaluating.
American Express Leverages Affluent Spending
Berkshire Hathaway holds a 22.5% stake in American Express, which constitutes approximately 13.5% of its total equity portfolio. The company’s financial performance in the latest quarter showed earnings of $4.53 per share, exceeding market forecasts. Despite this beat, the stock experienced post-earnings weakness due to a slight shift in revenue mix and a conservative outlook provided by management.
CEO Stephen Squeri highlighted successful membership growth among younger and affluent demographic segments as a key positive indicator. This segment drives the core business model, which relies on high spend volume and fee generation rather than just interest income. The company is currently trading at approximately 16 times forward earnings, a valuation lower than the historical average of over 20 times seen during periods of strong spending-driven growth.
Chubb Expands Underwriting Profit Margins
Chubb, a property and casualty insurer, has been a Berkshire holding since 2024, with the conglomerate owning 8.9% of outstanding shares. This position represents about 3.2% of Berkshire’s stock portfolio. The insurer’s performance in the second quarter of 2026 demonstrated strong fundamental growth, with core operating income rising 18.2% year over year.
Key balance sheet metrics also improved significantly, with book value increasing by 12.3% and tangible book value rising by 17.1% during the same period. The stock has surged nearly 25% over the past year, reflecting market confidence in its specialty insurance moat. Chubb currently trades at less than 12 times forward earnings, a multiple lower than peers known for similar underwriting strength, such as WR Berkley and Markel Group.
Valuation Gap Persists In Financials
The current market reaction to American Express’s mixed outlook and Chubb’s recent price appreciation creates a specific entry point for long-term investors. Both companies exhibit strong cash flow generation and market positioning that justify their premium valuations relative to broader financial indices. The retention of these stakes by Berkshire Hathaway under new leadership signals continued confidence in the structural advantages of these business models over the coming quarters.
