Andrew Bary

Berkshire Hathaway probably is capable of repurchasing over $50 billion of stock annually if it chooses to be aggressive with stock buybacks.

That would amount to about 5% of the company's shares outstanding based on Berkshire's market capitalization of nearly $1.1 trillion. An annual buyback of $50 billion-plus is certainly doable given the company's earnings power of about $45 billion annually and its huge cash reserves of $373 billion.

Many Berkshire holders would like to see the company get more aggressive with stock repurchases because they view the shares as undervalued and would like the company to draw down its cash reserves.

Barron's $50 billion-plus estimate is based on Berkshire's share repurchases of about $225 million on March 4, the day it resumed buybacks for the first time since May 2024.

The buybacks on March 4 could be determined from the share count as of the close of business on March 4 listed in the Berkshire 2026 proxy statement released late Friday.

There are about 250 trading days a year, and that suggests Berkshire could repurchase $56 billion of stock if it continued repurchases at a pace of $225 million a day.

Continued buybacks hinge on Berkshire's stock price since the company is price sensitive, with CEO Greg Abel recently emphasizing in a CNBC interview that the company repurchases stock when the shares trade below intrinsic value "conservatively determined."

If the stock price rises, Berkshire may limit its buybacks. Berkshire doesn't disclose its estimate of intrinsic value, but many investors use book value as an understated proxy.

The stock now trades for about 1.5 times the company's year-end 2025 book value, in the middle of its range over the past few years. The A shares ended Friday at $734,839 and the B stock at $490. Both are down around 2.6% this year, slightly ahead of the S&P 500 which is off about 2.8% after hitting a new low for the year on Friday.

It's notable that the Berkshire buybacks on March 4 were about 10% of the company's trading volume that day of around $2.2 billion, which occurred overwhelmingly in the Class B shares.

Barron's is assuming that Berkshire doesn't want to repurchase more than 10% of daily dollar volume, although it can buy nearly 25% of dollar volume based on Securities and Exchange Commission guidelines under rule 10b- 18.

Buying more than 10%, however, could move the stock and undercut Berkshire's goal of repurchasing stock as inexpensively as possible.

During 2020 and 2021, when Berkshire repurchased $24.7 billion and $27.1 billion of stock, respectively, as the peak of its buybacks over the past decade, it bought back an average of about $100 million a day, or about 8% of average daily dollar volume, Barron's calculates based on Bloomberg data.

The stock was cheaper than it is now in 2020 and 2021, trading at closer to 1.2 to 1.3 times book value. That was a driver of the big buybacks.

Chairman Warren Buffett, 95, has talked about the possibility of repurchasing a lot of Berkshire stock, but that the company is constrained by the volume in the shares.

Berkshire also could supplement open-market buybacks with direct purchases from individual investors or institutions, although the company hasn't done a lot of that.

Berkshire did buy back around $1 billion of stock in 2024 from Ruth Gottesman, the widow of longtime Berkshire director and Buffett friend David "Sandy" Gottesman, when she made a major donation. He died in 2022.

Many Berkshire investors have talked about the possibility that the company could repurchase a chunk of what is likely to be heavy annual sales of stock by Buffett's foundation after his death.

Those sales could total $15 billion annually as the foundation fulfills Buffett's desire to liquidate his estate and give away the money in about 10 years. Buffett's three children have been charged with giving away his fortune.

An issue there is that Berkshire's board could see it as a conflict to buy stock directly from the foundation by giving it what could be viewed as a potentially favorable price.

Berkshire doesn't appear to buy any stock that is sold annually by the Gates foundation, the main current recipient of Buffett's annual charitable donations. There have been no disclosures of any Berkshire purchases of Gates foundation stock that Barron's is aware of.

The Gates foundation sells the roughly $5 billion of stock it gets from Buffett annually -- apparently in the open market.

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

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 15, 2026 13:38 ET (17:38 GMT)

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