Warren Buffett Berkshire Hathaway

2022 - 8 - 7

Warren Buffett's Successor Gets a Path to Boost His Stake in Berkshire (Financial Post)

In a quarterly filing released alongside Berkshire financial results was the disclosure that Vice Chairman Greg Abel's common stock in Berkshire Hathaway Energy ...

And the logical thing is, if anything happened with the Scotts, we’d certainly offer it to Greg. But who knows what happens in the future.” The estate of Walter Scott Jr., a former Berkshire board member who died last year, owns the rest of the business, representing a potential target for a buyout by Berkshire, which has the right to purchase the shares before they’re offered elsewhere. “I would like to see Greg Abel deploy a substantial percentage of the after-tax proceeds of his BHE sale into Berkshire Hathaway shares,” Jim Shanahan, an analyst at Edward Jones, said in an interview. “And if not, you still have a difference in interest.” According to Berkshire’s most recent proxy statement, Abel owns five Class A shares in a trust and 2,363 Class B shares on behalf of family. The transaction, which Omaha, Nebraska-based Berkshire hadn’t previously disclosed, is notable because it touches on a concern raised by shareholders: Abel, who oversees Berkshire’s non-insurance businesses, is set to become chief executive officer once Buffett is gone.

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Berkshire Hathaway Energy Is Undervalued By $30 Billion (Seeking Alpha)

In the midst of Berkshire Hathaway's earnings report was the fact that the company increased its stake in Berkshire Hathaway Energy.

Berkshire Hathaway Energy has the FCF to justify that valuation and the company has significant overall growth potential. That acquisition showed that Berkshire Hathaway Energy was worth $30 billion more than it was listed on the company's balance sheet. In efforts to keep full transparency, related positions will be disclosed at the end of each article to the maximum extent practicable. The company still repurchased another $1 billion of shares in the quarter, and YoY the company's outstanding shares is down almost 4%. That's a number we'd like to see consistently come down. The non-owned stake of the company is more than $40 billion still, something it can comfortably afford. That's evidenced in the company's more than $40 billion official earnings for the quarter when taking into account earnings drops. The company's operating earnings were $9.3 billion although that includes $1.1 billion on non-U.S. denominated debt as a result of foreign currency changes. The business has $132 billion in assets, $25 billion in revenue, and $4 billion in earnings. The company took advantage of weakness in the crude markets to make several opportunist investments. He became MidAmerican's chief in 2008 and has since moved up the ranks at Berkshire Hathaway. Throughout that time he got a personal 1% stake in Berkshire Hathaway Energy. That $362 million charge implies a more than $30 billion discount on the company's 92% stake versus what it'd be willing to pay for it today. Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) conglomerate nature means that any investors in the company need to work hard to value its independent components.

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