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- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 8
I am still perplexed, as I assume many of you are, that BRK began buybacks at $486 ish, publicly disclosed on cnbc, and then ceased to actively buyback as the stock dipped well below $486?. Unfortunately, we will need to wait 3 more months to see if anything changes on this front?
My only thoughts on this are:
a) BRK is not compelling at $465+ to BRK?
b) BRK had an acquisition opportunity come across their desk and stopped buybacks during the evaluation process?
Does anyone have any thoughts or additional explanations?
I would also add an observation regarding insurance underwriting profits. I know Geico declined more than piers in Q1. Still not clear if this will improve over the year, but as Greg demonstrated on the slide, underwriting profits still are well above long term trends. Since I use the average of long term trends for my valuation model, the Q1 results do not negatively impact my updated valuation. Do others have a similar or different view when they update their IV?
No. of Recommendations: 4
The war started a week prior to Greg’s appearance. I think Berkshire has been cautious previously during big macro events.
And maybe an acquisition.
Also, they sold down the combs portfolio BUT spent $15B on equities. That’s a lot, yes, the net purchases equal more sales, they put money into something
No. of Recommendations: 13
I am still perplexed, as I assume many of you are, that BRK began buybacks at $486 ish, publicly disclosed on cnbc, and then ceased to actively buyback as the stock dipped well below $486?. Unfortunately, we will need to wait 3 more months to see if anything changes on this front?
My only thoughts on this are:
a) BRK is not compelling at $465+ to BRK?
b) BRK had an acquisition opportunity come across their desk and stopped buybacks during the evaluation process?
Does anyone have any thoughts or additional explanations?
I think the most likely explanation is that the company doesn't (and shouldn't) engage in significant repurchases immediately prior to major information events. Berkshire discloses virtually nothing beyond SEC requirements except for this one particular annual event, which means this pre-meeting period is the period that should be buyback-free if the goal is to not take advantage of less-informed shareholders. I believe Buffett has always acted as if this were any important aspect of any buyback decision.
If management believes Berkshire is undervalued, the following sequence of events makes perfect sense to me:
* Let the market know (via a public announcement and small repurchase) that, unlike the last few years, management views Berkshire shares as reasonably valued. (This includes letting the market know that the new CEO is open to repurchases.)
* Refrain from buybacks during the pre-meeting period as an informal blackout period.
* Begin buybacks in volume after the meeting, when shareholders have been fully informed.
Now, if there are no buybacks after the meeting, I'm going to take that as a signal about what management thinks about the current stock price.
No. of Recommendations: 5
I agree with rando
Greg may have been intentionally holding back ahead of the Annual Meeting.
Historically, Warren has been consistent on the principle all investors should have access to the same information at the same time.
If Greg knew he was going to more clearly define Berkshire’s structure, priorities, and opportunities at the meeting, it would make sense not to be aggressively repurchasing stock before that information was broadly shared.
In that context, the light buyback activity may not signal hesitation—it may reflect process and fairness.
Now that the cards are more fully on the table, the dynamic changes.
Also notable: Greg didn’t spend much time on buybacks during the meeting, despite having already indicated Berkshire was a buyer. That felt deliberate.
My takeaway:
The lack of buybacks so far may be about timing—not conviction. The $486 buy sure points to that.
And I wouldn’t be surprised to see Berkshire become a sizable buyer of its own stock going forward. Comfortably in this price range.
No. of Recommendations: 1
I keep seeing post about this. As I understand it the they only had to report through the first two weeks of April. Remember, the price started going down a lot in the second half so I would assume they bought back more but we will see it in the next quarter.
No. of Recommendations: 7
I keep seeing post about this. As I understand it the they only had to report through the first two weeks of April. Remember, the price started going down a lot in the second half so I would assume they bought back more but we will see it in the next quarter.
- Greg goes on CNBC 3/5/26 and announces they resumed buybacks on 3/4 (IIRC).
- The stock pops up to $500 on 3/5/26
- They buy just one days-worth at $729.7k/$486.92 (presumably all on 3/4/26)
- They buy nothing from 3/5/26 through 4/14/26, even though the price was below the previous buyback price most of that time.
- Greg on Saturday gave the usual criteria for buybacks - sufficient liquidity, below IV conservatively calculated.
- The business seems to be chugging along nicely.
The only palatable explanation is they wanted to wait to buyback in volume until after the meeting.
No. of Recommendations: 24
The only palatable explanation is they wanted to wait to buyback in volume until after the meeting.
Indeed. The other explanation is that the buyback they did was for performative reasons, not financial ones.
The valuation level was (and is) pretty borderline...around where buybacks stopped in the past.
I'm surprised some people are surprised that Berkshire's market returns in the last year have been poor--the valuations were unusually high a year ago, so what did they expect? An above-average year?
Jim
No. of Recommendations: 4
I'm surprised some people are surprised that Berkshire's market returns in the last year have been poor--the valuations were unusually high a year ago, so what did they expect? An above-average year?
The best feature of BRK is its predictability. Can anyone really complain when the stock follows its predictable trajectory?
No. of Recommendations: 1
The other explanation is that the buyback they did was for performative reasons, not financial ones.
Yes, that was the unpalatable reason I had in mind... :-(
No. of Recommendations: 7
Yes, that was the unpalatable reason I had in mind... :-(
Just to add a little more supporting evidence for no additional buybacks NOT being due to waiting for the annual meeting.
Berkshire repurchased shares consistently from July 2018 until the end of June 2024. During that six year period, they continued share repurchases through the ~two week period between end of Q1 and the creation of the Q1 report (~April 15)in all years except 2020 (pandemic) and 2022 (bv above 1.5x).
I believe we can infer they are not averse to purchasing shares during the period.
Jeff
No. of Recommendations: 1
"The Consultation Requirement: The board-approved policy mandates that the CEO (now Abel) must consult with the Chairman (Buffett) to determine that the repurchase price is below Berkshire's "intrinsic value" before acting."
I have a feeling that Greg is being super respectful, and though he is now CEO and "in charge" he is leaving the decision on buybacks to Warren. And we know how restrained our Chairman has been :)
No. of Recommendations: 2
"Indeed. The other explanation is that the buyback they did was for performative reasons, not financial ones."
Would be interesting if that is the case. It's never been our thing to do performative stuff for Wall Street but the small size of a single purchase certainly is odd. And Greg did basically say that going on CNBC and announcing it was a "one time time gift" but we have normally eschewed such behaviour :-) Again, they may have resumed buying in the second half of April and the price did drop a lot more at that time. Guess we need to wait another quarter to find out.
No. of Recommendations: 0
Just to add a little more supporting evidence for no additional buybacks NOT being due to waiting for the annual meeting.
Berkshire repurchased shares consistently from July 2018 until the end of June 2024. During that six year period, they continued share repurchases through the ~two week period between end of Q1 and the creation of the Q1 report (~April 15)in all years except 2020 (pandemic) and 2022 (bv above 1.5x).
I believe we can infer they are not averse to purchasing shares during the period.
Good point.
I can't believe Greg was trying to pump the share price. And they have sufficient liquidity ten times over for buybacks.
Maybe they're expecting the market to get impatient with Greg - were seeing that here - and expect a languishing share price pretty soon?
No. of Recommendations: 0
My only thoughts on this are:
a) BRK is not compelling at $465+ to BRK?
b) BRK had an acquisition opportunity come across their desk and stopped buybacks during the evaluation process?
Does anyone have any thoughts or additional explanations?
c) Berkshire was being extremely conservative by not making any transactions at all in the month+ before earnings.
d) Berkshire felt that the average daily volume was too low and they didn't want their trades to affect the market for Berkshire shares.
e) The maturity dates of their T-bills were mostly after the quarter.
There any many possible reasons.
