Berkshire Hathaway (NYSE:BRK.B) class B shares are climbing 3.5% Friday afternoon, clawing back some of the stock's 13% decline in the past month and bouncing up from a 52-week low touched on Thursday.
The shares in the company run by billionaire investor Warren Buffett hit $263.83 on Thursday. Granted, the decline came as broader markets also weakened. Still, Berkshire (BRK.B) (NYSE:BRK.A) shares' decline was steeper than the S&P 500's 4.5% drop in the past month.
Barron's estimated that Berkshire Hathaway's (BRK.B) (BRK.A) equity portfolio has fallen $60B in Q2, led by its largest holding, Apple (AAPL), and Bank of America (BAC), its second-largest holding. American Express (AXP) and Coca-Cola (KO) are its next two biggest holdings, according to Berkshire's 10-Q filing. See BRK's and its biggest holdings' stock performance for Q2-to-date in this chart.
With oil stocks recently dipping, Chevron (CVX), falling 15% in the past month and 11% since March 31, 2022, is also contributing to the drop in the value of its equity portfolio. Berkshire (BRK.B) disclosed holding 159M CVX shares at the end of Q1. Earlier this week, the Omaha-based company also said it bought 9.6M more shares of Occidental Petroleum (OXY), bringing its total stake to 16.3%. OXY stock hasn't risen during the bulk of Q2, closing Thursday, June 23, at $56.09 vs. $57.79 at March 31.
Barron's estimated that the company's book value will have declined to ~$315K per A share (BRK.A) vs. $345K on March 31. Buffett, though, prefers to look at the company's intrinsic value and look past the short-term gains or losses on its equity holdings.
The drop in Berkshire shares, though, may tempt Buffett to buy back more of the conglomerate's stock. In Q1 2022, the company repurchased $3.2B of its shares, slowing from the $6.9B it bought in Q4 2021. Instead, it had spent $40B to invest in other companies, including its $11B acquisition of Alleghany. At the company's annual meeting on April 30, Buffett said he hadn't repurchased any shares in April.
SA contributor Jim Sloan explains why the hit to book value presents a buying.
This was corrected on 06/27/2022 at 11:21 AM. In third paragraph, corrects equity portfolio decline to $60B, instead of 60%.