Berkshire Hathaway chief executive Greg Abel put a net $19.8 billion into the stock market in the second quarter, ending Warren Buffett's more than three-year selling streak. The buying included a $10 billion stake in Alphabet and $4.5 billion in Berkshire share buybacks, while second-quarter net income more than doubled to $25.67 billion.
Berkshire Hathaway chief executive Greg Abel put a net $19.8 billion into the stock market in the second quarter. The move ended Warren Buffett's more than three-year selling streak, Abel's predecessor at the top of the Omaha-based insurer. The purchases include a $10 billion deal to buy Alphabet common stock. Berkshire also spent $4.5 billion buying back its own shares during the quarter.
Abel breaks with Buffett's caution
Buffett spent the past three years pruning Berkshire's $324 billion listed stock portfolio, a period seen as a sign he thought equities were overvalued. Abel's decision to jump back into the stock market marks a break from that caution, particularly as US equities sit at record highs. Berkshire's cash levels dropped by $15 billion in the quarter, adjusted for government debt the company had bought but not yet paid for. The firm also sold $3.7 billion of stock during the period, the smallest amount since 2022.
The buying pushed Berkshire's stock purchases to $23 billion in the second quarter, including the Alphabet deal. That stake made the Google parent one of Berkshire's top five holdings.
Profit doubles as cash pile swells
Berkshire's second-quarter net income attributable to shareholders rose to $25.67 billion, or $17,868 per Class A equivalent share. That compares with $12.37 billion a year earlier. Investing.com reports the gain was driven by $16.08 billion in investment gains, largely unrealized appreciation across core holdings including Alphabet, Apple, American Express, Bank of America and Coca-Cola.
The company also repurchased $4.53 billion of its own shares in the quarter, up from subdued activity in the first quarter, bringing first-half buybacks to $4.76 billion. Repurchases happen only when the price sits below management's estimate of intrinsic value and cash stays above a $30 billion floor, and Investing.com reports the cash pile swelled to a record $359.2 billion during the quarter.
A more hands-on approach at the top
Abel's $6.8 billion acquisition of Taylor Morrison Homes followed his work anchoring a capital raise for Alphabet days earlier. The Financial Times reports the raise was worth $85 billion, among the largest transactions Berkshire has completed in recent years. Buffett praised Abel's execution, saying the new chief executive moved more quickly and decisively than Buffett himself could have.
According to The Motley Fool, Abel said Berkshire plans to "unify our site-built homebuilding operations into a combined platform." The comment points to a more proactive style at the top of Berkshire than Buffett's historically hands-off management of the businesses he bought.
Sources: Financial Times, Investing.com, The Motley Fool
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