Berkshire Hathaway repurchases $9B in stock, signaling undervaluation

Berkshire Hathaway just bought back roughly $8.5B of its own stock over a three-month stretch, according to UBS estimates. That’s not a routine capital allocation move. It’s the company’s way of saying, in the most Buffett-coded language possible, that its shares are cheap.

The buyback blitz, spanning from approximately April 15 through July 14, represents one of the most aggressive repurchase windows in the conglomerate’s history. And it arrives during a pivotal moment: the company’s first real chapter under new CEO Greg Abel.

The numbers behind the buyback wave

Berkshire resumed its stock repurchase program on March 4, ending a hiatus that lasted nearly two years. The first quarter was modest by comparison, with roughly $235M in shares repurchased.

Then the floodgates opened. Between April 14 and July 14, Class A shares outstanding declined by approximately 11,000. At prevailing market prices, that translates to somewhere between $5B and $11B in total buybacks, with UBS pinning its estimate at about $8.5B.

UBS pegs the discount to intrinsic value at around 8%.

Abel’s first big capital move

The buyback surge is notable for another reason: it’s happening under Greg Abel’s watch. Abel took the reins from Warren Buffett in a transition that has been closely scrutinized by investors eager to understand whether Berkshire’s legendary capital discipline would survive its founder’s departure.

Abel isn’t just authorizing corporate buybacks. He’s also putting his own money on the line. The new CEO purchased $15M worth of Berkshire shares, an amount equivalent to his after-tax annual salary, and has stated his intention to continue buying at that clip every year.

UBS responded to the buyback acceleration by raising its price target for Berkshire ahead of the company’s upcoming earnings release.