Berkshire Hathaway’s gigantic equity portfolio ended the fourth quarter on a strong note, given the outsize increase in its largest holding, Apple, and broad gains in its financial stocks.

Barron’s estimates the portfolio gained over $30 billion in the fourth quarter and likely finished the year at more than $250 billion.

Overall, Berkshire (ticker: BRKA) is doing better financially than its own stock-market performance suggests, and its equity portfolio is a key part of the favorable story. Berkshire is one of Barron’s10 top stocks for 2020, reflecting its reasonable valuation relative to book value and earnings.

Berkshire’s class A shares gained 11% in 2019 to $339,590, against a 31.5% total return for the S&P 500 index. That’s one of the worst relative showings for Berkshire during CEO Warren Buffett’s 54 years at the helm. The last time Berkshire lagged the S&P 500 by more than the 2019 margin was in 2009.

Berkshire A shares are up $1,840 to $341,430 in trading Thursday, and the company’s B shares (BRKB) have gained $1.18 to $227.68. The company is valued at $555 billion.

Barron’s estimates that Berkshire’s book value gained about $20,000 per A share in fourth quarter to $263,000, reflecting the large boost in the equity portfolio and projected operating income of $4,000 per A share. Buffett runs the bulk of the equity portfolio, with a portion of it—about $28 billion—divided between managers Todd Combs and Ted Weschler.

Our book-value estimate is above that of $254,000 made by Barclays analyst Jay Gelb in early November after Berkshire reported its third-quarter earnings. Since then, the stock market—and Apple (AAPL) in particular—have rallied. Berkshire is expected to report its fourth-quarter results on Feb. 22 in conjunction with the release of its annual report and shareholder letter.

The world’s largest conglomerate, Berkshire now trades at 1.3 times our estimate of fourth-quarter book value, which is lower than its average valuation in recent years. Gelb, who is bullish on Berkshire, has a price target of $375,000 per A share. Berkshire trades at about 21 times estimated 2020 operating earnings—above the market multiple of about 19. However, Berkshire’s earnings reflect only the dividends on its equity portfolio and the drag of about $128 billion in cash.

Berkshire’s operating earnings power is running at about $25 billion annually after taxes, reflecting contributions from its many businesses, including Burlington Northern Santa Fe railroad, Berkshire Hathaway Energy (a big electric utility and related businesses), and Geico, the No. 2 auto insurer in the country, behind only State Farm.

Apple stock gained 31% in the fourth quarter to $293.65, lifting the value of Berkshire’s holding to $73 billion—assuming no change in the company’s third-quarter Apple holding of 248.8 million shares. Apple accounts for about a third of Berkshire’s equity holdings. Apple is up another $4.87 to $298.52 Thursday, after setting another record high earlier in the session.

Berkshire also benefited in the fourth quarter from its large investments in financial stocks, led by Bank of America (BAC), Wells Fargo (WFC), American Express (AXP), U.S. Bancorp (USB), and JPMorgan Chase (JPM). Even Kraft Heinz (KHC), which performed poorly for much of 2019, gained 15% in the fourth quarter.

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