When Berkshire Hathaway (BRKA +0.54%) (BRKB +0.23%) reported its Q4 results over the weekend, the conglomerate was once again flush with cash on its balance sheet. The market had a strong 2025 and is hanging in there thus far in 2026, so it makes you wonder if Berkshire is being too patient with its cash.
The company ended the year with a whopping $373.3 billion in cash. That was down from the record $381.6 billion in cash the company had at the end of Q3, as it spent $9.7 billion to acquire OxyChem, the chemical subsidiary of holding Occidental Petroleum.
Image source: The Motley Fool.
However, Berkshire was once again a net seller of stocks for the 13th straight quarter. Its main source of funds continues to be from the sales of Apple and Bank of America, two stocks it has been selling pretty consistently.
Apple, however, remains Berkshire's largest holding, and new CEO Greg Abel pointed to it as being a long-term core holding, along with American Express, Coca-Cola, and Moody's in the U.S. He also highlighted several Japanese companies that fell into this bucket, as well.
Berkshire once again decided not to repurchase any of its own shares. It was the sixth straight quarter that the company has decided not to do a buyback. However, the company did start to buy back shares earlier this month.
In the past, Berkshire would repurchase its shares when they were trading at 1.1 times book value or below, before later increasing it to 1.2 times. More recently, it stopped using price-to-book ratio (P/B) altogether, with former CEO Warren Buffett saying the metric wasn't always reflective of the stock's intrinsic value. The stock has come down from the 1.8 P/B it had reached and is now around 1.4 times, which is a bit more in line with where the stock has traded over the past several years.
In his first annual letter as CEO, Abel preached patience with Berkshire's huge cash hoard, saying the company needed to remain disciplined and wait for its pitch in the heart of the zone.
He also emphasized the importance of risk management, including outside its large insurance businesses.
NYSE: BRKB
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Is it time to buy Berkshire stock?
Investors seem to have started to become a bit frustrated with Berkshire's lack of action, and with Buffett no longer at the helm, they may not have the same patience with its new CEO. However, taking a large stake in a stock in which Berkshire doesn't have conviction or buying its own stock at an unattractive valuation also aren't smart moves. That said, in a world where technology is quickly coming to dominate, Berkshire's lack of expertise in this area is notable.
I think Berkshire will be a good long-term investment and that the stock is finally starting to approach a more attractive valuation. Meanwhile, with the recent buyback, the company finally finds its own stock valuation attractive enough to buy its own shares, so investors can begin to follow suit.
