Abel puts a big chunk of Berkshire's cash to work

In his second quarter as the new CEO of Berkshire Hathaway, Greg Abel did some serious spending.

As a result, the company's still huge cash reserves declined significantly for the first time since early 2022.

Saturday morning's financial report for the three months ending June 30 shows Berkshire had $365.5 billion on hand, a reduction of 8.0% from its record high $397.4 billion as of March 31.

Excluding BNSF's cash and adjusting for Treasury bills purchased but not yet paid for, a metric favored by Berkshire, the company's cash declined 3.8% to $359.2 billion. 

Part of that spending was for $4.5 billion of Berkshire share buybacks.

The repurchasing came in below the low end of Barron's rough estimate of $5 billion to $11 billion and is less than UBS analyst Brian Meredith's $8.5 billion forecast.

But it is still significantly more than the $235 million Berkshire spent during the first quarter, and that was the first time it did any buybacks at all since 2024.

CFRA Research's Cathy Seifert tells Bloomberg, "People are going to be encouraged by the buybacks. It's also Greg's way of taking the helm and asserting himself."

Gabelli Funds portfolio manager Macrae Sykes is also positive on the move, telling CNBC, "Material repurchases provide confidence for shareholders that some of the best corporate capital allocators see current value." 

And the buying may have continued. By comparing Berkshire's outstanding shares as of July 29, as shown in its Q2 report, to its shares as of June 30, Barron's now estimates Berkshire spent another $3.4 billion on buybacks in July.

Much of that presumably came before the stock's rally near the end of the month.

Abel wasn't just spending money on Berkshire shares.

In another major change, Berkshire bought more equities than it sold overall, for a net increase of $20 billion. That would also include the $10 billion investment in Alphabet, Google's parent, that was announced in June.

It had been a net seller for the past 14 quarters.

We'll find out exactly what Berkshire was buying and selling when it releases its Q2 portfolio snapshot in the coming week.

Investors will also like most of Berkshire's operating earnings for the second quarter.

Overall, they increased 16% to $12.98 billion with strong numbers from Berkshire Hathaway Energy (up 27%) and the BNSF railroad (up 6%).

Manufacturing, service, and retail earnings increased 24% to almost $4.5 billion.

Insurance, however, wasn't as good, with underwriting earnings falling 13% and insurance investment income dropping 9%.

GEICO was a particularly weak spot, with underwriting profits falling 45%.

Gabelli's Sykes, however, remains encouraged. "Despite more difficult insurance industry back-drop, the company continues to build shareholder net worth in Greg Abel's first year as CEO." 

Berkshire Hathaway trimmed its position in DaVita a few days before shares of the dialysis provider gave back a chunk of their sizable year-to-date gains.

The sale, however, didn't have anything to do with the 23% plunge in DaVita's stock price for the week after its Tuesday Q2 earnings report revealed a decline in revenue per treatment as patients drop out of Obamacare plans due to terminations of pandemic subsidies.

Under a 2024 agreement with DaVita in which Berkshire agreed to keep its stake in the company at 45% or lower, DaVita is required to buy back enough shares from Berkshire once a quarter to counter any reduction in DaVita's outstanding shares due to repurchases.

DaVita's outstanding shares decreased by just 400,000 in its second quarter, so Berkshire's holding was reduced by just under 183,000 shares, making its remaining 28.7 million shares, valued at almost $5.3 billion, a 45.0% stake.

Berkshire received $36.5 million for the shares, which is a very small amount by the company's standards, so the price per share isn't very important.

It is interesting to note, however, that on July 31, the day of the transaction, DaVita closed at just over $240.

According to the Berkshire filing, however, it got just under $200 per share.

That's because the agreement stipulates the per share price is the "volume-weighted average per share price" of DaVita's public buybacks during the quarter.

Berkshire still came out a little bit ahead, however, as the stock is now trading just under $184.

And, looking at the bigger picture, even with this week's drop, DaVita is still up almost 62% so far this year.

BRK.A stock price: $780,085.97

BRK.B stock price: $521.80

BRK.B P/E (TTM): 15.53

Berkshire market capitalization: $1,124,120,356,283

Berkshire Cash as of March 31: $397.4 billion (Up 6.5% from Dec. 31)

Excluding Rail Cash and Subtracting T-Bills Payable: $380.2 billion (Up 3.0% from Dec. 31)

Berkshire repurchased $234 million of its shares in Q1 2026.

Berkshire's top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices.

Holdings are as of March 31, 2026, as reported in Berkshire Hathaway's 13F filing on May 15, 2026, except for:

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)

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Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch