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Key Insights From the Berkshire Hathaway Annual Meeting

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Key Insights From the Berkshire Hathaway Annual Meeting
Securities In This Article
Berkshire Hathaway Inc Class A
(BRK.A)
Berkshire Hathaway Inc Class B
(BRK.B)

Joshua Aguilar: For Morningstar I'm Joshua Aguilar. With me is Gregg Warren, our analyst for Berkshire.

So Gregg, what'd you think about the meeting? Do you have any key take aways for us? Gregg Warren: I thought the meeting last year was a lot more informative. It seemed like they touched on a lot more subjects, but overall I thought it went well. I think probably the first key take away was a lot of interest in share repurchases, sort of where they're willing to buy back the stock.

Then one of the other things happened here at the end of the meeting when they sort of talked about the fact that they'd be willing to put $50 billion into a preferred stock if they could. Then the question I had on the longer-term ability for the next managers to be able to hold on to a ton of cash or have to migrate the firm over to a returning capital shareholder's vehicle--it kind of surprised me, because Warren sort of hinted at that might actually happen on his watch. So overall, some interesting take aways but not enough there to really move the needle. Aguilar: Do you think we learned anything on terms of succession? I mean we actually saw from both Ajit and Greg today, clearly they seem like the likely successors, at least one of the two, as you pointed out. You think we learned anything on that front?

Warren: Not a whole lot. I mean Greg is still sort of my front runner for the role. I think Warren wants a younger person in there that can run the business for 20, 30 years. Greg sort of fits that criteria. He did highlight both of them, have them both out there talking to shareholders, addressing questions, which is good. It's good for shareholders to hear from them.

I think the other more interesting thing on succession is I don't think we're going to know until Warren's gone. I think they're still holding that card close to their vest. Aguilar: You mentioned about the migrating investment vehicle. It's really been hard for them to beat returns. Your price to fair value, and I guess it's a 4-star stock right now. Why should anybody hold the stock in the future you think? Warren: I still think there's some good reasons to step into it. Right now it's in our best ideas list, and I think one of the main reasons is you've got the potential for a large amount of share repurchase. Eventually a dividend's going to come down. Buffett's gonna find some ways to put this capital to work. There's the potential if they change the holding requirements for banks, they can ramp up their holdings in that as well. So, the cash problem may not be as evident two, three years from now, relative to what we've seen historically. I think that that's one big indicator.

There are things--businesses themselves are operating very well. They're all firing all cylinders, and from a competitive advantage perspective, a lot of them operating under the Berkshire umbrella are far more competitivly advantaged than if they were public. Aguilar: Great, those are really great insights. Thank you so much. For Morningstar, I'm Josh Aguilar.

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About the Authors

Greggory Warren, CFA

Strategist
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Greggory Warren, CFA, is a strategist, AM Financial Services, for Morningstar*. He covers the traditional US- and Canadian-based traditional asset managers, as well as the alternative asset managers and Berkshire Hathaway. Over the course of his career, Warren has covered not only financial services names but companies from the consumer staples and consumer cyclicals sectors, and been involved in portfolio stock selection and management.

Prior to joining Morningstar in 2005, Warren worked as a buy-side equity analyst for more than eight years, covering consumer staples and consumer cyclicals. Before assuming his current role at Morningstar in 2017, Warren covered the financial-services sector as a senior analyst since late 2008. Prior to that time, he covered the non-alcoholic beverage manufacturers and distributors, packaged food firms, food service distributors, and tobacco companies.

Warren holds a bachelor's degree in accounting and English from Augustana College. He also holds the Chartered Financial Analyst® designation and is a member of the CFA Society of Chicago.

During 2014-19, Warren was selected to participate each year on the analyst panel at Berkshire Hathaway’s annual meeting, asking questions directly of Warren Buffett and Charlie Munger. The analyst panel was disbanded ahead of Berkshire’s 2020 annual meeting. Warren also ranked second in the investment services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

Joshua Aguilar

Director
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Joshua Aguilar is a director, AM Resources, for Morningstar*. After previously covering multi-industrial conglomerates and financial services firm, he is now assuming coverage of exploration and production firms in the oil and gas industry.

Prior to joining Morningstar in 2016, Aguilar was a practicing business transactional attorney in Florida. Aguilar joined Morningstar in 2016 as an Associate on the Financials team, was promoted to Analyst on the Industrials team in 2018, and Senior Analyst in 2022. He’s also served as our Associates Coordinator since 2021 and led our diversity efforts as DEI co-chair since 2020. Aguilar has served as a key mentor to several Associates on their path to Analyst. He’s also hosted a Morningstar earnings townhall, participated in Analyzing MORN, and been a strong contributor through both client interactions and his GE stock call. Josh co-authored an Outstanding Research Achievement (ORA)-winning piece with Kris Inton on CEO compensation in 2021. He’s also taught the model to new hires for many years as part of the Valuation Committee.

Aguilar graduated Magna cum laude with a B.A. in political science and criminology from the University of Florida. He also has an MBA from Rollins College and a J.D. from Wake Forest University. Aguilar remains an active member of the Florida Bar Association.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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