1 week ago
5
Keith Speights, The Motley Fool
Tue, March 17, 2026 astatine 3:05 AM CDT 4 min read
Warren Buffett didn't authorize buying backmost a azygous stock of Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) during his past six quarters arsenic CEO of the conglomerate. His successor, Greg Abel, reversed people astir instantly aft taking the helm.
Interestingly, though, Berkshire's stock terms is higher than it was during overmuch of the play erstwhile Buffett refused to repurchase shares. Did Berkshire's caller CEO conscionable interruption from Buffett's playbook?
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Unlike astir publically traded companies, Berkshire Hathaway doesn't necessitate the committee of directors to authorize a banal buyback. The CEO tin bash truthful erstwhile helium "believes that the repurchase terms is beneath Berkshire's intrinsic value."
Buffett evidently didn't deliberation Berkshire's stock terms was beneath its intrinsic worth successful the 2nd fractional of 2024 and each of 2025. However, Abel believes it is now. But wherefore would helium erstwhile Berkshire is trading higher than it was passim overmuch of Buffett's past twelvemonth and a fractional arsenic CEO? The reply lies successful the explanation of intrinsic value.
Perhaps the champion explanation of intrinsic worth is that it's the inherent, existent worth of a banal based connected an nonsubjective analysis. Importantly, though, the existent worth of a banal is mostly babelike connected outer factors. For example, a golden banal volition person a higher intrinsic worth erstwhile golden prices are higher.
I fishy that Abel looked astatine the existent marketplace dynamics and concluded that Berkshire's businesses are worthy much than they were successful the past successful antithetic prevailing conditions. I besides deliberation that his comments successful the yearly shareholder missive are telling. Abel wrote that helium expects BNSF's operating margins to amended importantly implicit the adjacent fewer years. His assurance successful this betterment could person contributed to his rosier presumption of Berkshire's intrinsic value.
Berkshire Hathaway shareholders should admit that Abel isn't conscionable utilizing the company's currency to scoop up the conglomerate's shares. He is besides personally investing successful Berkshire Hathaway.
Abel revealed that helium bought 21 Berkshire Class A shares successful the archetypal 4th of 2026 for astir $14.6 million. That amounts to the after-tax worth of his $25 cardinal yearly salary. He present owns 249 Class A shares valued astatine astir $187 million.
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