CNBC’s Jim Cramer said Friday that global insurer and recently revealed Warren Buffett mystery stock Chubb is still undervalued. Cramer called Chubb — selling at 12 times forward earnings — “ridiculous” given the stock’s 19% year-to-date rise and nearly 40% gain over the past 12 months. “This stock is going much higher,” he added. CB 1Y mountain CB 1-year stock performance. Chubb offers a variety of insurance products, including commercial and personal property and casualty. Sixty percent of its business comes from the U.S. The bulk of its non-U.S. business is in Asia. “[The company] has a great relationship with China,” Cramer said on CNBC, arguing the world’s second-largest economy is a “tremendous opportunity” for the insurer. During a “Mad Money” interview Thursday evening, Chubb CEO Evan Greenberg said the U.S. and Asia are the two regions of the world with the “greatest potential for growth.” Adding to the enthusiasm for the stock was the disclosure last month that Buffett’s Berkshire Hathaway accumulated nearly 26 million shares. The stake at Friday’s stock price was worth around $7 billion. Berkshire had been keeping this purchase secret for two quarters straight as the stake was being built. Cramer believes it’s possible that Buffett could continue purchasing Chubb in the future, which would be a further catalyst for shares to go higher. Berkshire’s insurance portfolio includes Geico, General Re, and lots of home and life insurance services.
CNBC’s Jim Cramer said Friday that global insurer and recently revealed Warren Buffett mystery stock Chubb is still undervalued.
Cramer called Chubb — selling at 12 times forward earnings — “ridiculous” given the stock’s 19% year-to-date rise and nearly 40% gain over the past 12 months.
“This stock is going much higher,” he added.
CB 1-year stock performance.
Chubb offers a variety of insurance products, including commercial and personal property and casualty. Sixty percent of its business comes from the U.S. The bulk of its non-U.S. business is in Asia.
“[The company] has a great relationship with China,” Cramer said on CNBC, arguing the world’s second-largest economy is a “tremendous opportunity” for the insurer.
During a “Mad Money” interview Thursday evening, Chubb CEO Evan Greenberg said the U.S. and Asia are the two regions of the world with the “greatest potential for growth.”
Adding to the enthusiasm for the stock was the disclosure last month that Buffett’s Berkshire Hathaway accumulated nearly 26 million shares. The stake at Friday’s stock price was worth around $7 billion. Berkshire had been keeping this purchase secret for two quarters straight as the stake was being built.
Cramer believes it’s possible that Buffett could continue purchasing Chubb in the future, which would be a further catalyst for shares to go higher.
Berkshire’s insurance portfolio includes Geico, General Re, and lots of home and life insurance services.
