Berkshire Hathaway's New Playbook: Abel Turns the Page on a Fourteen-Quarter Sell-Down

Berkshire resumes buybacks, invests $23.5B in Q2, cuts cash pile to $365.5B, signaling a more aggressive capital allocation under Greg Abel.

The most telling signal about Berkshire Hathaway's future under Greg Abel isn't coming from Omaha's corner office — it's coming from the company's own treasury department. After more than three years of net selling, the conglomerate has flipped the switch, pouring billions back into both its own stock and external holdings in a decisive break from the defensive posture that defined the late Buffett era.

The numbers tell the story. In July alone, Berkshire plowed $3.3 billion into its own shares, building on the $4.5 billion in buybacks executed during the second quarter. That resumption of aggressive repurchases — management's clearest statement that it views the stock as undervalued — ended a 14-quarter stretch of net disposals. During Q2, the company deployed $23.5 billion into new equity purchases while selling just $3.7 billion, a dramatic reversal of the capital-allocation strategy that had prevailed since 2022.

The cash pile reflects the shift. Berkshire's war chest contracted from a record $397.4 billion at the end of March to $365.5 billion by June 30, the combined result of stepped-up investment activity and the renewed buyback program.

A Concentrated Portfolio Gets Even Bolder

The 13F filing for the second quarter shows a portfolio that has swelled to roughly $299 billion, with the five largest positions accounting for about 72% of the total. The most striking move: Berkshire increased its Alphabet stake by 83%, largely through a $10 billion private placement that vaulted the Google parent into the number-three slot behind Apple and American Express.

The shopping list extended across sectors. New positions were established in Ally Financial (approximately $1.24 billion), Capital One Financial (around $601.9 million), and steelmaker Nucor ($413.8 million). Existing bets were scaled up aggressively — Delta Air Lines grew 44% to 57.3 million shares, while homebuilder Lennar expanded 30% to 13.4 million shares worth about $1.2 billion. Smaller additions came in Macy's and the New York Times.

On the other side of the ledger, Berkshire trimmed or exited several holdings to bank gains, including Bank of America, DaVita, Kroger, Ally Financial, and Capital One — the latter two appearing in both the buy and sell columns as the firm rotated positions within the same names.

The offensive comes on the back of solid fundamentals. Second-quarter operating earnings rose 16.3% year over year to $12.98 billion, while net income attributable to shareholders more than doubled to $25.67 billion, helped by $10.9 billion in unrealized gains from the equity portfolio. The manufacturing, service, and retail segments led the way, with Berkshire Hathaway Energy also contributing. Insurance underwriting remained the weak spot, declining 13% to $1.73 billion. The company's EPS of $6.02 comfortably beat the consensus estimate of $5.13.

Legal Closure — With a Caveat

On the litigation front, an appellate court on Friday upheld the 2024 settlement in a class-action lawsuit against Berkshire subsidiary HomeServices of America. The company agreed to pay $250 million of a total settlement exceeding $1 billion to resolve allegations that long-standing rules on splitting broker commissions artificially inflated costs. The sum is being paid out over four years, with roughly $130 million already held in trust.

The matter isn't entirely closed, however. Berkshire Hathaway Energy, HomeServices' parent, still faces a separate commission-related class action. A judge ruled in April that this case falls outside the scope of the HomeServices settlement, leaving a residual legal risk on the table even as the larger question is resolved.

Insider Confidence and Analyst Endorsements

Management has been putting its money where its mouth is. In the first half of August, General Counsel Michael O'Sullivan acquired 488 Class-B shares through a trust, while CFO Charles Chang purchased two Class-A shares at $765,000 apiece. Over the past twelve months, insider buying has totaled $0.5 million with no registered sales.

Wall Street has taken notice of the strategic pivot. UBS analysts raised their price target on the B-shares from $585 to $604 on August 26, reiterating a buy rating on the back of the more aggressive capital allocation and strong Q2 results. Seeking Alpha's Jonathan Weber upgraded his stance from "Hold" to "Buy" on August 17, citing the "buy signal" emanating from the resumed repurchases.

The stock itself has been more subdued. Shares last traded at €651,000, down 0.5% on Monday and sitting 5.1% below the 52-week high of €686,000 set in August — though still 2.4% above the 200-day moving average. The market's tepid response to the operational momentum suggests investors are waiting for further confirmation.

That confirmation could come on November 6, when Berkshire reports third-quarter results. The key question: whether Abel maintains the pace of this capital offensive, or whether the second-quarter burst was a one-off recalibration. For a company that spent fourteen quarters in retreat, the answer will define the new era.