Berkshire buybacks have returned, but narrow discount could limit impact
Berkshire Hathaway has resumed stock buybacks after nearly two years even though its shares aren’t particularly cheap, a move that may do little to boost the sprawling conglomerate’s shares. In a recently proxy filing, Berkshire disclosed that it repurchased the equivalent of 309 Class A shares on March 4, totaling about $226 million. The transaction marked the company’s first buyback since May 2024. UBS estimates Berkshire’s shares were trading at roughly a 5% discount to intrinsic value as of March 4 — below the average 15% discount during the company’s last buyback program that began in the third quarter of 2018. The narrower discount could limit how much stock it will repurchase and, in turn, how much support buybacks provide the shares. “We think the lack of meaningful buybacks (presumably because the firm does not think its shares are undervalued) is a factor that removes a near-term catalyst from the shares,” said Cathy Seifert, a Berkshire analyst at CFRA Research. BRK.A YTD mountain Berkshire Hathaway class A shares year to date Shares of Berkshire are unchanged from the March 3 close, the day before repurchases began. The stock has fluctuated in recent months and is down 4% year to date amid mixed signals on earnings momentum, leaving investors closely watching for cues from Abel and his deputies at the upcoming shareholder meeting in early May. Berkshire’s policy gives management flexibility to repurchase shares whenever they are deemed to be trading below intrinsic value, with new CEO Greg Abel making that determination in consultation with Chairman Warren Buffett. Abel said earlier this month that he discussed the decision directly with Buffett , evaluating both valuation and timing before moving ahead with the purchases. He added that while the company typically doesn’t call attention to the start of buybacks, management chose to highlight the move this time given the recent leadership transition. Abel took over the reins from Buffett at the start of the year. Berkshire had a total market value of some $1.04 trillion in late trading Friday.
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