Jim Cramer: Warren Buffett’s Mystery Stock Chubb Still Undervalued and “Going Much Higher”

In a recent segment on CNBC, renowned financial expert Jim Cramer shared his bullish outlook on global insurer Chubb, which was recently revealed as a mystery stock held by Warren Buffett’s Berkshire Hathaway. Cramer emphasized that despite Chubb’s impressive performance, with a 19% year-to-date rise and nearly 40% gain over the past 12 months, the stock is still undervalued at 12 times forward earnings.

Cramer’s confidence in Chubb’s potential for further growth stems from the company’s strong position in the insurance market, offering a range of products including commercial and personal property and casualty insurance. With 60% of its business coming from the U.S. and a significant presence in Asia, particularly China, Chubb is well-positioned to capitalize on opportunities for expansion in these key regions.

During a recent interview on “Mad Money,” Chubb CEO Evan Greenberg echoed Cramer’s sentiments, highlighting the U.S. and Asia as areas with the greatest potential for growth in the insurance industry. Greenberg’s optimism about Chubb’s future prospects aligns with Cramer’s bullish stance on the stock.

The recent disclosure of Berkshire Hathaway’s significant stake in Chubb, totaling nearly 26 million shares valued at around $7 billion, further fueled enthusiasm for the stock. Buffett’s decision to accumulate shares in Chubb, while keeping the purchase under wraps for two quarters, underscores the company’s strong fundamentals and growth potential.

Cramer speculates that Buffett’s continued interest in Chubb could serve as a catalyst for further appreciation in the stock price. With Berkshire’s diverse insurance portfolio, including well-known brands like Geico and General Re, Chubb stands to benefit from the expertise and resources of one of the most respected investors in the industry.

Overall, Cramer’s endorsement of Chubb as a compelling investment opportunity reflects the company’s solid performance, strategic positioning in key markets, and the endorsement of a legendary investor like Warren Buffett. As Chubb continues to demonstrate its value and growth potential, investors may find it worthwhile to consider adding this undervalued stock to their portfolios for long-term gains.