Greg Abel Recently Bought $235 Million Worth of Warren Buffett's Favorite Stock

Warren Buffett served as the CEO of the Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) holding company from 1965 to 2025. It became a trillion-dollar conglomerate under his leadership, with numerous wholly owned subsidiaries and a $300 billion portfolio of publicly traded stocks and securities.

At the start of 2026, Buffett handed the reins to his chosen successor, Greg Abel, who has some big shoes to fill. Abel kicked off his tenure by purchasing $235 million worth of his predecessor's favorite stock -- but you won't find it in Berkshire's portfolio. Read on.

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Buffett's simple investment strategy produced incredible returns

Berkshire Hathaway was a struggling textiles company when Buffett acquired a controlling stake in 1965. After realizing its core business wasn't viable, he converted it into a holding company for his various investments. He poured money into many different companies since then, focusing on those with steady growth, reliable profits, and strong management teams.

Buffett particularly liked companies that returned money to shareholders through dividends and stock buybacks, because they compounded Berkshire's returns significantly faster. One example is Coca-Cola (NYSE: KO); Buffett spent $1.3 billion to acquire 400 million shares in the beverage giant between 1988 and 1994, and he never sold a single one. The position is now worth $32 billion, and it paid Berkshire $816 million in dividends last year alone.

Apple (NASDAQ: AAPL) is another example. Buffett invested approximately $38 billion in the iPhone maker between 2016 and 2023, and the position was valued at over $170 billion at the start of 2024. At that point, Apple represented half the value of Berkshire's entire stock portfolio, so Buffett and his managers sold three-quarters of the position by the end of 2025 to reduce risk and lock in gains.

Buffett was also very active in the private markets during his 60-year tenure. He bought entire insurance companies, logistics companies, and utilities, which continue to fund Berkshire's other investments through their consistent annual cash flow.

Berkshire stock produced a compound annual return of 19.7% between 1965 and 2025, trouncing the average annual return of 10.5% in the S&P 500 (SNPINDEX: ^GSPC) index over the same period. In dollar terms, $1,000 invested in Berkshire stock in 1965 would have been worth $48.5 million by the end of 2025, while the same investment in the S&P would have grown to just $399,702.

Buffett plowed $77.8 billion into Berkshire stock between 2018 and 2024

Apple remains Berkshire's largest position, and $38 billion is more money than Buffett ever invested in any other company. However, between 2018 and 2024, he plowed $77.8 billion into another stock that you won't find in the conglomerate's portfolio -- Berkshire itself.

Berkshire has become so large that its portfolio managers have struggled to find new investment opportunities that are big enough to actually move the needle. Therefore, in the final years of his tenure, Buffett opted to return some of the conglomerate's idle cash to shareholders instead, and stock buybacks were his chosen method.

Buffett would authorize Berkshire to purchase its own shares on the open market, which would shrink the available float and, in turn, give existing shareholders a larger slice of the company. Buybacks give investors more control over when they realize their gains for tax purposes, compared to alternatives such as dividend payments, which are taxed almost immediately.

But after authorizing $77.8 billion worth of buybacks between 2018 and 2024, Buffett didn't authorize any buybacks in 2025, much to the surprise of investors.

BRK.A Stock Buybacks (Quarterly) data by YCharts

There are a couple of plausible reasons why. First, Berkshire stock set multiple new record highs in 2025, and as a value investor, Buffett probably wanted to wait for a better opportunity. Second, he knew he would step aside at the end of the year, so he may have wanted to leave important executive decisions, such as stock buybacks, to his successor, Abel.

Greg Abel just restarted the buyback machine

Berkshire can engage in stock buybacks at management's discretion, as long as the value of its cash, cash equivalents, and holdings in government Treasury bonds remains above $30 billion. Since the company entered 2026 with more than $360 billion in dry powder, Abel had everything he needed to pick up where Buffett left off in 2024.

During the first quarter of 2026, which ended March 31, Abel authorized $235 million worth of buybacks. While that isn't a huge number, it signals his willingness to return money to shareholders, which could bode well for Berkshire's returns during his tenure.

Only time will tell whether Abel will be as aggressive as Buffett when it comes to buybacks, but considering the conglomerate's cash pile ballooned to over $397 billion during the first quarter, he certainly has room to up the ante from here -- especially if he can't identify any major acquisition opportunities in the near future.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.