Market watchers and analysts have been closely watching whether the company will resume buybacks, a key capital allocation tool it typically uses when shares trade below its estimate of intrinsic value.
Berkshire announced its fourth quarter earnings on Saturday, marking the the last quarter for Buffett. It was also the thirteenth consecutive quarter in which Berkshire sold more stocks than it bought, and the sixth with no share buybacks, news agency Reuters reported.
What does ‘intrinsic value’ of stock mean?
Abel said that the company is holding onto the buyback until Berkshire’s stock reaches its intrinsic value, which refers to the calculate “true” or fundamental worth of a company’s share.
It is determined by analysing financial performance, cash flows, and growth potential, rather than its current market price. The intrinsic value also acts as a benchmark to determine if a stock is undervalued, overvalued, or fairly prices.
Abel plans to head the company for long
On Saturday, Abel also suggested that he plans to remain Berkshire’s chief executive for a long time. He further said that in about two decades, he will have ‘a fraction’ of Buffet’s 60-year tenure.
In his first annual letter to Berkshire shareholders, Abel paid tribute to his mentor, referring to Buffett as a “remarkable CEO” and “arguably the greatest investor of all time” and pledging to maintain his discipline in determining how to invest Berkshire’s capital, Reuters reported.
Berkshire’s Q4 earnings
Berkshire Hathaway said today that its operating profit fell in the fourth quarter, reflecting lower income from its insurance operations, and wrote down a longstanding investment in Occidental Petroleum, the ageny said.
The multinational holding company also reported ending 2025 with $373.3 billion of cash, giving Abel the financial firepower to pursue the kind of major acquisitions that Buffet was unable to secure over the past decade.
