Berkshire Hathaway now trading at 1.26 times book value

November 8, 4:55 PMWarren Buffett ExaminerWilliam Freehling

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Warren Buffett's Berkshire Hathaway is now trading at 1.26 times book value, a discount to where it's traditionally traded during the recent past.

Berkshire reported Friday that its net worth was $126.1 billion as of Sept. 30, up 10.1 percent from the end of the second quarter and 15.2 percent from year-end. The company's market cap as of the end of trading Friday was about $159 billion.

Berkshire had about $62 billion of insurance float (money it holds from insurance contracts but can invest) as of Sept. 30, up $4 billion from the end of 2008. Buffett told shareholders in Omaha this spring that the insurance float was a big part of Berkshire's competitive advantage.

A strong insurance underwriting profit, investment income and derivative gains pushed Berkshire's third-quarter net earnings to about $3.2 billion, about the same as second-quarter results but triple the net earnings from Q3 2008. 

Operating earnings, which Buffett has said are a good barometer of Berkshire's results, were $2.1 billion, up from $1.8 billion in the second quarter and down just slightly from Q3 2008. Though Berkshire's operating results seem to be improving slightly, they're still weighed down by weakness in the company's myriad retail and manufacturing businesses.