u/GutBeer101

By Andrew Bary

Investors will soon learn what changes Berkshire Hathaway made to its equity portfolio in the first quarter — and the company's smaller holdings probably were impacted.

Berkshire bought $16 billion of stocks in the first quarter of 2026 and sold $24 billion, making it one of the most active periods for the company in recent years, based on information from the 10-Q report that was released Saturday in conjunction with its first-quarter earnings.

The 10-Q doesn't detail individual equity holdings in Berkshire's $325 billion portfolio, but that information as of March 31 will be disclosed for most of the portfolio in a 13-F report likely on May 15.

Berkshire sold most of the stocks held by investment manager Todd Combs in the first quarter after he left for an investment job at JPMorgan Chase, The Wall Street Journal reported recently. Those Combs investments may have totaled about $15 billion — and Berkshire sold more stocks given the $24 billion in total sales for the period.

What was sold?

Berkshire has never disclosed which stocks in its portfolio were managed by Combs and Ted Weschler, who each ran about 5% of the total, with chairman Warren Buffett handling the rest. Weschler remains at Berkshire, and now oversees nearly $20 billion of stock investments.

Possible sales include many of the smaller holdings in the portfolio that each total $3 billion or less. These include Kroger, Visa, Mastercard, Constellation Brands, Domino's Pizza, Aon, Ally Financial, Verisign, Pool, and Amazon.

Aon, Pool, Constellation, and Amazon are good candidates for sale since Berkshire reduced those holdings in the fourth quarter. The company may have started the Combs-related stock sales immediately after Combs left Berkshire in December. Domino's could also be a Combs holding.

One clue to where the selling was concentrated came with a disclosure in the Berkshire 10-Q that the cost basis of its equity holding in consumer and financial stocks fell in the quarter--meaning there were sales in those sectors.

It's unlikely that Berkshire touched its larger holdings that CEO Greg Abel has said are core investments. These are Apple, Moody's, American Express, and Coca-Cola. Other big investments, such as Bank of America and Chevron, likely didn't see major changes.

It's also unlikely that there were sales of Sirius XM Holdings and Liberty Live Holdings since those probably are Weschler stocks — he owns them personally.

Another clue is that Berkshire realized about $8 billion of gains on the sales of $24 billion, meaning that it likely didn't sell much of long-held equity holdings with big embedded gains.

It will be interesting to see if Berkshire pared back or sold its Alphabet holdings that it bought in the third quarter of 2025. It's also possible that it bought more Alphabet.

The well-timed purchase of about 18 million Alphabet shares is up more than 50% in value to $7 billion given the surge in Alphabet stock, Barron's estimates. The Alphabet purchase also highlights the frustration that some Berkshire holders have with the company.

Berkshire is sitting on $380 billion in cash and it could have made Alphabet a major holding of $25 billion to $50 billion, but it only bought about $4 billion worth of shares. That holding is now worth around $7 billion — not enough to really move the needle at Berkshire, which has a market capitalization of $1 trillion.

The $16 billion of stock buys in the first quarter marked the largest quarterly buys since 2022. Berkshire, for example, bought $17 billion of stocks in all of 2025 — and a total of about $25 billion combined for 2023 and 2024.

What did Berkshire buy? The purchases likely included what the company calls commercial and industrial stocks — a catch-all category which saw an increase in cost basis in the period.

Who bought those stocks? Weschler may have bought some and Buffett told CNBC in late March he made a "tiny" purchase. It's possible that Abel, who now oversees over 90% of the portfolio, did some buying, too.

The 13-F report due next week promises to be one of the more eventful in some time for Berkshire.

>Greg Abel's solid performance at his first annual meeting as Berkshire Hathaway's CEO, could be overshadowed by the company's trivial stock repurchases in the first quarter that were disclosed Saturday.

>We'd give Abel a B-plus for his showing over several hours in Omaha. Great on the financial details, but he needs improvement on his delivery — too many rambling answers — and on capital allocation messaging.

>Berkshire stock is down 6% this year, with the Class A shares finishing Friday at $710,300 and trailing the S&P 500 by 11 percentage points. The gap is about 40 percentage points over the past year.

>Many Berkshire holders would like to see the company get more aggressive with stock repurchases given what looks like an attractive valuation and the company's enormous cash reserves, which hit a record $380 billion on March 31 adjusted for the timing of some Treasury bill purchases.

>Wall Street cheered Berkshire's disclosure on March 5 that it had started share repurchases on the prior day for the first time since May 2024 — buying over $200 million on March 4, according to later disclosure. The stock rose over 2% on March 5.

>But rather than continuing to repurchase stock, it appears that Berkshire stopped after one day. It turned out that Berkshire bought back only $235 million of stock in the quarter and none in the first two weeks of April even though the stock price dipped below the price of about $730,000 an A share, where it stood on March 4. That's a minimal amount of buyback relative to Berkshire's $1 trillion market value.

>Abel never addressed this at the meeting Saturday and didn't offer an explanation.

>Some thought Berkshire might have bought back $2 billion to $3 billion in March, and Barron's wrote that the company is capable of $50 billion of stock buybacks annually.

>As one longtime Berkshire watcher told Barron's, why publicly announce the restart of a repurchase program — which isn't required from a regulatory standpoint — and then repurchase just a minimal amount of stock?

>The size of the buyback program is viewed as a referendum on how appealing the stock is to Abel, 63, and chairman Warren Buffett, who together control the program. They evidently don't think the stock is sufficiently cheap relative to intrinsic value to buy much of it.

>That message might not excite investors on Monday even though the stock looks inexpensive, trading for 1.4 times its quarter-end book value of about $506,000 a Class A share — near the lower end of the range of the past few years.

>That gets to a broader issue. What is Berkshire going to do with all its cash?

>At the meeting, Abel said that over the long term, Berkshire would deploy the cash, which is growing about $50 billion annually from earnings. Berkshire pays no dividend and there is no prospect of one while Buffett, 95, is alive.

>Both Abel and Buffett don't see much to do with the cash now. The stock market is at record levels and so are prices for many private businesses. Abel offered no plan for deploying the cash other than being patient and awaiting opportunities.

>In a CNBC interview held during the meeting, Buffett said this isn't "an ideal environment" for investing and noted there were just five "juicy" years for investing during his 60 years running Berkshire.

>It doesn't appear that Abel has much of an investment team — himself, Buffett and manager Ted Weschler. Todd Combs, who ran about 5% of the equity portfolio under Buffett, left for an investment job at JP Morgan in December and won't be replaced, The Wall Street Journal reported. Weschler is running less than 10% of the portfolio.

>Berkshire has about triple the cash of the next largest U.S. company and it continued to be a net seller of stock for the 14th straight quarter in the first three months of the year. It sold a net $8 billion — buying $16 billion and selling $24 billion, according to its 10-Q. Since the end of 2022, it has been a net seller of about $172 billion of stock, much of that Apple.

>Berkshire is a highly discriminating buyer of stocks and businesses at a time when there are trillions of dollars of capital in the hands of other investors who are less demanding. That reduces the chances that Berkshire finds a big elephant-size deal that Buffett has long sought.

>The Journal reported that Abel sold the Combs-managed stocks, which could have totaled $15 billion, and that could have included the sale of Amazon shares, which Berkshire sold in the fourth quarter. Why sell the stocks just because Combs left and incur taxes? It seems almost petty. They likely were solid companies — including possibly Visa and Mastercard — although Berkshire doesn't disclose which stocks he managed.

>The Apple stake is down almost 80% to about 229 million shares with a market value of over $60 billion. Berkshire has left a lot of money on the table with Apple, up about 50% to $280 a share from what Barron's estimates is its average selling price.

>Berkshire's operating earnings were good in the first quarter, rising 18% to $11.3 billion after taxes and up a still solid 7% adjusting for currency swings, Barron's calculates. There was improvement at the BNSF railroad, where profits gained 13% to $1.4 billion. That's encouraging since BNSF has been a lagging performer among its railroad peers and Berkshire has actively sought to narrow the gap.

>Abel and BNSF CEO Katie Farmer discussed that strategy at the meeting.

>Abel said that the company, which isn't a corporate tech leader, is seeking to improve technology throughout Berkshire divisions including at BNSF.

>While insurance underwriting profits were up 28% to $1.7 billion, Abel said results benefited from a lack of catastrophes in the period and said the pricing environment for P&C insurers is "becoming more challenging."

>Abel impressed some Berkshire watchers with his command and detailed knowledge of the many Berkshire businesses and for showcasing at the meeting management talent, including Farmer, insurance chief Ajit Jain, and Adam Johnson, who oversees about 30 consumer-related divisions including NetJets and Brooks running shoes.

>"It has been a flawlessly executed handoff," said Chris Bloomstran, the chief investment officer of Semper Augustus Investments, after the meeting.

>Abel answered less than 15 questions, a fraction of those often fielded by Buffett.

>Abel gave long, winding answers to many questions and could benefit from being more concise.

>Advice from Barron's: consider getting a speaking coach. Many CEOs do — and don't admit it. And consider doing quarterly conference calls. They would be informative for Berkshire investors and help him hone his message.

>Without Buffett at the helm, Berkshire needs a strong advocate and probably needs to broaden its investor base.

>When a deepfake Warren Buffett asked the first question at the meeting, why should an investor hold Berkshire for the long term, it took Abel several minutes to answer it.

>He said part of it is the "culture and values...that's the bedrock of Berkshire."

>"How will — personally, myself and the team — define success?" he later added. "We'll define success. define success is, can we ensure that Berkshire endures in its current form."

>That question should have been an easy one for Abel and answered in under a minute. We could have said is a version of what Buffett wrote 20 years ago when he began making annual charitable contributions:

>"The company has a multitude of diversified and powerful streams of earnings, Gibraltar-like financial strength, and a deeply-imbedded culture of acting in the best interests of shareholders." Buffett later added Berkshire is one of few companies where chances are low of a permanent loss of capital for a long-term investor.

>Abel not surprisingly forcefully rejected the idea that Berkshire, the world's biggest conglomerate, should break up, saying the company benefits from diversification and the ability to shift capital between businesses as opportunities arise.

>Berkshire has a good story to tell, and Abel can better make the case. That's something to work on ahead of next year's meeting.

>Write to Andrew Bary at andrew.bary@barrons.com

>OMAHA, Neb. — The billion-dollar question for Berkshire Hathaway CEO Greg Abel is how he deploys the company's huge cash pile.

>That's roughly how Berkshire maven Chris Bloomstran described it at the 17th annual Value Investment conference sponsored by Gabelli Funds in Omaha, Neb., a day before Berkshire's annual meeting.

>Berkshire's cash level stood at $373 billion at year end, and Bloomstran and others on a panel had some acquisition ideas for Abel. Bloomstran mentioned S&P Global, a large company with a $125 billion market value that owns S&P Ratings, one of the top credit-ratings firms.

>S&P Global, a Barron's stock pick, is down almost 20% this year to $429 on AI disruption concerns that Bloomstran thinks are overblown. He noted Berkshire already holds a sizable stake in rival Moody's.

>Bloomstran, the chief investment officer of Semper Augustus Investments, added that Berkshire probably needs just $100 billion of its cash to support its insurance business, giving it plenty of wherewithal for a large deal.

>Adam Mead, author of The Complete Financial History of Berkshire Hathaway , said Berkshire should consider buying the rest of Occidental Petroleum, the energy company in which it holds a stake of more than 25%. Occidental stock trades around $59 and buying the rest of the company could cost Berkshire more than $50 billion.

>Mead also suggested Copart, a leader in auctioning damaged or totaled automobiles often sold by insurers. It has only one competitor, he noted, and Copart's stock is down almost 50% in the past year. Copart, he said, is digestible with a market value around $30 billion and its valuation is down to under 20 times earnings. Shares trade around $33.

>Brett Gardner, author of Buffett's Early Investments, mentioned Kinsale Capital Group, a highly profitable specialty insurer of property and casualty risks. That stock is down about 40% from its peak a year ago to $317 — and it hit a 52-week low Friday.

>P&C insurers have been under pressure due to concerns about weakening pricing.

>Gardner also said Abel might look in his "circle of competence," which includes utilities and infrastructure.

>Write to Andrew Bary at andrew.bary@barrons.com