Berkshire, the 'Post-Buffett' Era, Holds Record Cash and Buys Back Shares for the First Time in Two Years

[The Financial News]  

Greg Abel, who succeeded Warren Buffett, the Oracle of Omaha, as the head of Berkshire Hathaway, received an initial passing grade as CEO on May 2, local time.
The first quarterly earnings report he presented after officially taking office on January 1, alongside the annual shareholders' meeting, was not bad. Still, many believe Abel, who is closer to a hands-on manager, will find it difficult to become a legend like Buffett.
Investor expectations for Berkshire after the handover from Buffett to Abel appear to be modest.
Berkshire's flagship stock, which trades at more than $710,000 per share, has fallen 5.9% so far this year. That contrasts with the S&P 500 Index, which has risen 5.6% while repeatedly setting new record highs.

According to WSJ, CNN and other foreign media outlets, Berkshire held its annual shareholders' meeting on Saturday, May 2, as usual, in Omaha, Nebraska, where the company is headquartered. But instead of Buffett, who had led the meeting for 60 years, Abel presided over the event.
Some said the excitement around Berkshire's shareholders' meeting has faded since Buffett handed over the reins. The legendary figure has stepped back from the front lines of management.
This year's Berkshire meeting, often described as the 'Woodstock Festival for capitalists' in reference to the rock festival, was seen as less lively than in previous years.

Abel has also inherited Buffett's strategy of stockpiling cash while saying he has yet to find a stock attractive enough to buy.
At the end of the first quarter, Berkshire's cash holdings reached a record $397.38 billion, up about $24 billion from the end of last year.
The increase in cash holdings was mainly due to net stock sales. Berkshire has been focusing more on selling than buying, and in the first quarter it sold $24.1 billion worth of shares while buying $15.9 billion.
Berkshire has now posted net sales for 14 consecutive quarters.
Its own earnings fell short of expectations.
Operating profit came in at $11.35 billion, up about 18% from a year earlier. That was below the market estimate of $11.56 billion.
Net income jumped 120% from a year earlier to $10.11 billion, reflecting unrealized gains on its stock holdings.

Berkshire's portfolio, disclosed at the meeting, showed little change from before.
Apple, the long-standing No. 1 holding, along with American Express, Bank of America, The Coca-Cola Company and Chevron Corporation, accounted for about 75% of the portfolio.
While maintaining 14 straight quarters of net selling with about $8.1 billion in net sales, Berkshire expanded its investments in fossil fuels and showed continued interest in Japanese trading houses.
Berkshire supported Occidental Petroleum, in which it is the largest shareholder, as the company struck a $9.5 billion deal in January to acquire a chemicals-related firm.
Abel also visited Japan's five major trading houses, in which Buffett has been heavily investing since 2020, and described them as long-term holdings.
Berkshire holds roughly 9% stakes each in Mitsubishi Corporation, Mitsui & Co., Ltd., ITOCHU Corporation, Marubeni Corporation and Sumitomo Corporation. These are its largest equity investments outside the United States.
Meanwhile, Berkshire Chairman Buffett praised Abel as the right person for the job, saying he is doing everything Buffett himself used to do and doing it even better.


[email protected] Song Kyung-jae Reporter