Berkshire Hathaway (BRKA 0.46%)(BRKB 0.38%) stock has been under pressure in recent months, and for a few reasons. Most obviously is the retirement of legendary CEO Warren Buffett, who stepped down from the top spot at the end of last year. In fact, Berkshire hit an all-time high just before Buffett's retirement announcement in May 2025, and has yet to regain that level, despite the S&P 500 rising by more than 21% since that time.
In addition, Berkshire recently reported its fourth-quarter earnings, and while there wasn't anything terrible about them, they certainly weren't great. Insurance underwriting income fell sharply, and most of Berkshire's other business segments saw single-digit increases in their operating earnings.
Image source: The Motley Fool.
Finally, many shareholders were hoping to hear ambitious plans in Abel's first shareholder letter -- especially for putting some of the company's $373 billion cash hoard to work. Instead, he spent most of the letter emphasizing that he'll continue to use Warren Buffett's principles for running the company, something that has been reiterated many times by both Abel and Buffett and is generally understood by investors already.
A reason for investors to be excited
Berkshire made two revelations that could get investors excited about the value of the company's shares.
NYSE: BRKA
Key Data Points
First, new CEO Greg Abel said he bought $15 million worth of Berkshire stock with his own money and pledged to use his full salary to keep doing the same every year he's running the show.
Second, and more significant, Berkshire disclosed that it resumed buying back its own shares for the first time since the second quarter of 2024.
Berkshire's buyback program isn't as formal as those of most other companies. It allows for buybacks whenever the CEO (Abel) and the chairman of the board (Warren Buffett) both agree that the stock price is trading at a significant discount to its intrinsic value. Abel confirmed in a CNBC interview that he indeed consulted with Buffett before initiating the new buybacks.
It's unclear at this point how much money Berkshire is spending, or plans to spend, on buybacks. We'll get the official data from the first quarter in a couple of months (when Berkshire has its next annual meeting). But this is certainly a big vote of confidence from Abel and Buffett, and although Abel is just a couple of months into his tenure as CEO, this is the first somewhat bold move he has made, at least in terms of allocating Berkshire's capital.
