The stocks erased some of those losses to end the week down around 1.2%.
CNBC.com's Yun Li quotes Keefe, Bruyette & Woods analyst Meyer Shields as saying he views "both the resumed share repurchases and Greg's commitment to annual buying as positives, but they don't change the earnings challenges at units like GEICO or Berkshire Hathaway Reinsurance."
Gabelli Funds portfolio manager Macrae Sykes thinks "it's great to see more economic alignment with shareholders after the announcement from Greg about future stock purchases."
Cathy Seifert at CFRA Research calls the resumption of buybacks "positive," but "at this juncture my view is that Berkshire's Class B shares are fairly valued, particularly given the tepid financial results."
BECKY QUICK: Good morning, everybody, and welcome back.
We have some breaking news right now coming from Berkshire Hathaway. The company has just filed a Form 4 and an 8K.
And joining us to talk about those topics and his first letter to shareholders after taking the reins from Warren Buffett is Berkshire Hathaway's CEO Greg Abel.
Greg, welcome. It is great to see you this morning.
GREG ABEL: It's great to be here. Good morning, Becky. Morning, Joe.
QUICK: We really appreciate your coming on set. We have so much to talk about.
But let's jump in with the news that is just crossing the wires, and that's what's coming from the 8-K. That's the big headline here, that Berkshire Hathaway has begun repurchasing shares of the common stock under the previous policy that had been out there before.
How many shares are you buying back? Why are we hearing about this?
ABEL: Yes, so we've had a longstanding policy that when the intrinsic value, as we see it, and computed on a conservative basis, when it exceeds our market price, Berkshire has always acquired shares. That's been our longstanding policy.
We highlighted that in the 10-K and in my letter that that remained in place, and we've just recommenced yesterday.
So, the point being we see value, the intrinsic value exceeds the current market value, and we started — recommenced purchasing.
And we felt it was important to communicate to our shareholders, our partners, our owners, that with the transition of leadership and that this is the first time we're purchasing shares, it was important to let them know we've recommenced.
QUICK: Yeah. The last time that you had bought back shares was May of 2024. Berkshire shareholders have long realized that it might be Charlie, maybe Warren, talking to each other, kind of figuring what they thought was a fair value for the price of things.
Did you talk to anybody about it, or you looked at it and you thought this is a good time to be buying back?
ABEL: No, I absolutely talked to Warren. So, how we — how I approached it was obviously looking at the value, having a view of intrinsic value, consulted with Warren relative to the value and the timing of is it ready to — are we ready to recommence?
And the thought there was after the consultation, we filed our 10-K, we —there's a 70 — a 48-hour cooling off period Monday and Tuesday, and we commenced purchasing on Wednesday morning.
QUICK: Have you been looking at this for a long time?
ABEL: We look at it continuously.
KERNEN: What are the three top things that would make you think— is it something to the price of sales? Is it — what jumps out as a signal that the intrinsic value is not recognized by the share price? Which things?
ABEL: Well, what we always look at is what are the economic prospects of each of our companies in Berkshire. And we look at that over the long term.
KERNEN: Is it a gut feeling more than — are there numbers where you'd say, OK, this hit, you know, 80 percent of this part of Berkshire or something that —nothing that specific?
ABEL: It's really just looking at the economic opportunities that exist within Berkshire and are we comfortable that the value proposition is very strong, and we're doing it on behalf of obviously our shareholders and owners.
We have to view this as value, that we're creating value for our shareholders long term.
KERNEN: So, if the stock goes up from the announcement or from the buybacks, how long would you do this? How much — will you keep doing it until it remains the case that you feel it's undervalued? You can do as much as you want?
ABEL: Correct. As long as our intrinsic value exceeds the market value, again, conservatively determined, we'll continue to repurchase.
But the one thing we have never done is we don't disclose the amount, the timing, or the computation. But we did feel this time it was important because of the change in leadership that we should.
QUICK: So, we're not going to hear something like this from you again. We won't know when you're in the market buying back?
ABEL: This is a one-time event to let our shareholders know.
KERNEN: And you won't say it's a $20 billion buyback and we're halfway through? We won't know anything.
KERNEN: Is that a reasonable number? Could it be — it could be a lot more at Berkshire.
ABEL: It's completely dependent upon the intrinsic value and how that equation remains in place.
QUICK: So, Berkshire shares up until a minute ago were down maybe one percent over the last year. Market's been up. You guys have $373 billion in cash as of the last filing.
QUICK: I guess you're looking around, and it tells you that this is something that makes way more sense to you than buying other things —other stocks — making other purchases?
ABEL: Exactly. We always look at, effectively, three buckets when we're allocating our capital.
We have our existing businesses, deploying capital back into those, both for their current operations and incremental opportunities. That really exists every day. And we're constantly challenging ourselves, are we thinking about that properly?
As you highlighted, Becky, there's also, do we acquire stock? And when we're looking at companies, do we acquire whole companies also?
