Berkshire Hathaway Resumes Share Repurchases Amid Stock Undervaluation

Berkshire Hathaway has recently recommenced repurchasing its own shares, marking its first buyback since the second quarter of 2024. This move, as indicated in a new regulatory filing, signifies the conglomerate’s belief that its stock is currently trading below its intrinsic value.

According to the disclosure, the company initiated the repurchase of both Class A and Class B shares on March 4, following its longstanding repurchase policy. This policy allows Berkshire to buy back its stock whenever management deems the market price to be lower than its conservatively estimated intrinsic value.

At present, Berkshire holds approximately $373.3 billion in cash and short-term investments, a record amount accumulated during Warren Buffett’s final years at the helm. The company is now under the leadership of CEO Greg Abel.

Under the repurchase policy, Berkshire is not bound to repurchase a specific number of shares. Buybacks can be executed through open market purchases or privately negotiated transactions, and are subject to suspension based on share prices, market conditions, and other variables.

Additionally, CEO Greg Abel has personally invested around $15 million in Berkshire Class A shares, underscoring his confidence in the company’s long-term value. Abel acquired approximately 21 Class A shares through his family trust, with prices averaging around $730,000 each, thereby increasing his holdings to hundreds of millions of dollars in Berkshire stock.

The disclosure of these buyback activities coincides with Berkshire’s ongoing leadership transition post Buffett’s shift away from the CEO role. The company emphasized that the announcement was made in the interest of transparency.