One equities expert says competition in the mergers and acquisitions market has pushed Berkshire Hathaway Inc. to the sidelines, following the Omaha, Nebraska-based firm reporting its fourth-quarter earnings. 

Cathy Seifert, a director at CFRA Research, said in an interview with BNN Bloomberg Monday that Berkshire Hathaway’s results beat expectations and delivered a “decent quarter given the backdrop.” Warren Buffett’s conglomerate moved toward a US$1 trillion valuation after posting its latest results as the firm's cash holdings have jumped to a record high of $167.6 billion. 

Seifert said she doesn’t expect the company to “expend all of that cash” as it needs to maintain liquidity to pay claims for its insurance business. However, she noted that Berkshire Hathaway has an “adequate amount of dry powder” to do a deal. 

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“But again, the market valuations are probably getting a little rich for Berkshire's appetite. They've got a lot of competition in the M&A (mergers and acquisitions) environment from private equity, venture capital (and) industries consolidating. So it definitely is challenging.” 

However, she added that she expects acquisitions to be part of the firm’s capital allocation plan and is optimistic about the company’s future. 

“My buy on Berkshire largely reflects the strength in their insurance franchise. And I am definitely more positive on the property casualty insurance space because the industry has pricing power,” Seifert said. 

Berkshire reported operating earnings of $8.48 billion during the fourth quarter, up from $6.63 billion a year earlier. 

With files from Bloomberg News.