Warren Buffett's Canadian stock purchase revealed: Chubb stock jumps after Berkshire buy-in

How long ago was Warren Buffett buying Chubb?

As Chairman of Berkshire Hathaway, Buffett had accumulated Chubb shares since the beginning of Q3 2023. According to Morningstar, Chubb was already among the top 10 holdings of the Berkshire portfolio by the end of Q1 2024.

According to Morningstar strategist Greggory Warren, the acquisition of Chubb, a Canadian insurance firm, presents a unique opportunity for the Berkshire Hathaway group. Chubb's size and liquidity make it an ideal candidate for consolidation, potentially eliminating competition. As a property and casualty insurance firm, Chubb directly competes with Berkshire Hathaway Reinsurance Group (BHRG) and Berkshire Hathaway Primary Group (BHPG). Warren's belief in the acquisition's potential lies in the investment it could bring to growing the Chubb book of business, a strategic move that could significantly benefit Berkshire Hathaway.

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3 other stock similar to Chubb

While Buffett did not disclose specific details about the potential Canadian investment target, he hinted at Berkshire's ability to contribute positively to the Canadian market.

"Obviously, there aren't as many big companies up there as there are in the United States," Buffett noted. "There are things we actually can do fairly well that Canada could benefit from Berkshire’s participation."

AIG - American International Group (NYSE:AIG)

A leading global insurance provider and international finance firm. This multinational insurance provider has seen relatively big growth over the last year with 52-week low, per share, of USD$52.78 and a 52-week high of USD$80.83.

AXA - (CS.PA)

As a multi-line global insurer AXA is predicted to have good growth and good value. Unlike many of Berskhire's holdings, AXA trades on the Paris stock exchange. It's 52-week low is USD$25.21 and the 52-week high is USD$35.19.

Great-West Lifeco - (TSX:GWO)

This Canadian insurance company has been a favourite of Canadian investors for quite some time. Almost three-quarters (72%) of Great-West Lifeco belongs to Power Financial Corporation (TSX:PFC). The 52-week low for GWO is CDN$37.06, while the 52-week high is CDN$45.18.

Where to buy shares of Chubb or other P&C insurance providers

You can purchase shares through a bank investing firm or, to keep trading costs low, use an online discount brokerage or trading platform. Good options include:

• CIBC Investor’s Edge: Get 100 free trades and up to $4,500 cash back when you open and fund a new investment account
• Questrade: Get a $50 trade commission rebate
• Wealthsimple Trading: Get $25 and commission-free trades when you open and transfer $150 or more into the trading account

Other investment options to consider

While investing in stock can be a great strategy for earning better-than-market returns, there is always the risk of a stock losing value. To minimize this risk, investors should keep a diversified investment portfolio.

Rather than pick stock, a good option is to buy and hold an index fund — a basket of equities that follow the overall market trends. Good options include:

• Vanguard Canadian Short-Term Corp Bond IDX ETF (TSX:VSC)
• Vanguard Canada Inc S&P 500 Index EFT (TSX:VFV)
• Vanguard S&P 500 ETF (TSX:VOO)
• Vanguard FTSE All Cap Index ETF (TSX:VCN)
• iShares Core S&P 500 ETF (TSX:IVV)
• SPDR S&P 500 ETF Trust (TSX:SPY)
• Vanguard Total Stock Market ETF (TSX:VTI)

For anyone interested in investing on autopilot, check out Wealthsimple’s auto-invest account. Open a new account and deposit $500 or more and get $25 in cash back.

Bottom line

Canadian investors can learn from long-term investors, such as Warren Buffett, without replicating the exact trade or position. By examining companies and industries that are the focus of Buffett's current portfolio, many investors are able to find good, long-term purchases for their investment portfolios. Always keep in mind that past performance does not guarantee future earnings.