Andrew Bary

Berkshire Hathaway's cash-rich balance sheet and other defensive attributes hasn't helped much in the stock market's tough start to 2026.

Berkshire's class B shares fell for the eighth straight session on Friday, their longest losing streak since 2018. The B shares ended Friday at $468.49, down 1.4% in the session, outperforming the S&P 500, which fell 1.7% and hit a new low for 2026.

Berkshire's B shares are now down 6.8% in 2026, slightly behind the negative 6.7% total return for the S&P 500. The Berkshire A shares are also down 6.8% this year to $703,700.

The Berkshire performance is disappointing since the company is arguably the most defensive mega-cap stock in the market, given its $373 billion of cash and about $45 billion of annual operating income. The cash position is almost 40% of its market value of $1 trillion.

Berkshire stock arguably should be trading better. Besides its cash position, two of its key businesses -- insurance and electric utilities -- aren't economically sensitive. Utility stocks are higher this year and the defensive property and casualty sector is also beating the market. Berkshire's big energy stock investments, Occidental Petroleum and Chevron, are up sharply in 2026 and are worth a total of around $45 billion.

This year's stock market drop gives Berkshire the chance to invest more aggressively than it has in recent years. That decision likely is up to Berkshire's new CEO, Greg Abel.

This could be a good time for investors to get exposure to Berkshire. The stock now trades for about 1.4 times book value, down from a peak of 1.8 times when the A shares peaked at over $800,000 in early May 2025.

Berkshire board member Chris Davis described Berkshire as an "anti-fragile" stock, borrowing a phrase from author Nassim Taleb, in a Barron's Live program on Monday. That is, Berkshire's fortress balance sheet and its durable earnings make it more valuable in times of stress or chaos, since it can deploy capital when others are constrained. Put another way, the cash offers what some investors call "optionality," or the ability to invest aggressively in tough times.

The stock's pullback could also provide an opportunity for Berkshire to ramp up its stock repurchases, which began on March 4 with about $225 million of buybacks. The company disclosed on March 5 that buybacks had resumed on the prior day after a nearly two-year hiatus. Since then, the stock has fallen about 3% and that may entice Berkshire to buy back more stock.

It's possible that Berkshire could buy back a few billion dollars of stock this month. It will also be interesting to see if Berkshire added much to its equity portfolio this quarter as stock fell. Investors should learn more when the company reports first-quarter results, which is expected to occur on May 2, the date of the annual shareholder meeting in Omaha.

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

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(END) Dow Jones Newswires

March 28, 2026 09:32 ET (13:32 GMT)

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