Andrew Bary

Berkshire Hathaway's best investment since Covid-19, a group of five Japanese trading companies, is now worth close to $40 billion after a rally in the stocks in 2026.

Berkshire holds stakes averaging about 9% in five companies: Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. Their market capitalizations range in size from Sumitomo at $4.6 billion to Mitsubishi at more than $10 billion, according to data compiled by CNBC.

All five stocks are higher in 2026. Mitsubishi and Marubeni are up about 20%, topping the benchmark Topix index, which is 7% higher.

Berkshire's cost is $13.8 billion, meaning the company has nearly tripled its investment, which began in 2019 and was disclosed by Berkshire in September 2020. Chairman Warren Buffett revealed the cost basis and discussed the investment in his shareholder letter a year ago.

The calculation doesn't include currency gains because Berkshire effectively hedged its exposure to the yen by selling debt in the Japanese currency to help finance the purchases. Berkshire had more than $2 billion of after-tax gains on its yen borrowings through the end of 2024, Buffett disclosed

This reflects the yen's depreciation of about 40% versus the dollar since 2020. A weaker yen means it would take fewer dollars to repay the debt, reducing its size in U.S. dollar terms.

The group of five companies have varying strategies that can involve investment and trading in natural resources and infrastructure. Their combined value makes them Berkshire's third-largest equity investment behind Apple and American Express.

The companies were a classic Buffett score -- inexpensive, misunderstood, and off the map. Berkshire paid less than 10 times earnings for the bunch, but since then, their profits have grown and their price/earnings multiples have expanded, creating a double benefit to Buffett's conglomerate.

"Berkshire made its first purchases involving the five in July 2019," Buffett wrote in the shareholder letter last year. "We simply looked at their financial records and were amazed at the low prices of their stocks. As the years have passed, our admiration for these companies has consistently grown."

"Each of the five companies increase dividends when appropriate, they repurchase their shares when it is sensible to do so, and their top managers are far less aggressive in their compensation programs than their U.S. counterparts."

Buffett wrote that Berkshire plans to hold them for the "very long term" and potentially increase the stakes over 10%, though not much above that level.

"I expect that Greg and his eventual successors will be holding this Japanese position for many decades and that Berkshire will find other ways to work productively with the five companies in the future," Buffett wrote. Greg Abel succeeded Buffett as Berkshire's CEO at the start of this year.

Berkshire has had relatively few notable winning equity investments since Covid, including one last year in Alphabet. The period has been marked by missed opportunities, some bad investments such as Occidental Petroleum and Paramount, and poorly timed sales of stocks, including a group of big banks from 2020 to 2022.

But the Japanese trading companies, demonstrating Buffett's distinctive investment skills, have been a big win.

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

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February 05, 2026 11:17 ET (16:17 GMT)

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