Should You Buy Class B Shares of Berkshire Hathaway While They're Below $500?

After roughly six decades, legendary investor Warren Buffett is no longer chief executive officer of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B). During his long tenure, Berkshire's stock crushed the broader benchmark S&P 500 index, and Buffett became known as arguably the greatest investor of all time. Buffett will remain chairman of the company's board, but it's undoubtedly a new era at Berkshire.

Buffett chose Greg Abel as the new CEO, a Berkshire veteran who has been working at the company since 1999. Given all the changes, should investors purchase Class B shares of Berkshire Hathaway while they trade for less than $500?

The company is in a position of strength

Class B shares of Berkshire were introduced in 1996 as a way to make Berkshire's stock more affordable for investors. With the availability of fractional shares now, investors can purchase portions of a Class A share, so there is not as much of a need as there once was, but the shares certainly feel more attainable than Class A shares, which trade at about $744,100 (as of Jan. 2).

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Make no mistake, the departure of Buffett and the aura he brought to the company will make the stock less desirable for investors, at least in the near term. There have also been other changes among senior leadership, notably the departure of Todd Combs, who helped invest 10% of Berkshire's huge equities portfolio and also served as the CEO of the GEICO Insurance unit.

Yet Buffett leaves Berkshire Hathaway in excellent shape. The company operates several large businesses at scale that few, if any, can replicate. This includes Berkshire's enormous insurance operations, which generated $22.6 billion of earnings in 2024. Berkshire also operates other strong businesses across various sectors, including the Burlington Northern Santa Fe Railroad, Berkshire Hathaway Energy, and businesses in manufacturing, services, and retailing.

Berkshire uses the money it generates from the float in its insurance business -- money collected from policyholders but not yet paid out in claims -- to invest in stocks across various sectors. Berkshire's equities portfolio is valued at more than $300 billion, with some of its larger holdings including Apple, American Express, Bank of America, Chevron, and Coca-Cola. Finally, Berkshire has a fortress-like balance sheet with cash, cash equivalents, and short-term U.S. Treasury bills valued at more than $377 billion as of the end of the 2025 third quarter.

Some speculate that Buffett purposefully built this large cash hoard to put Abel in a strong position for the CEO transition, as Buffett knew that there might be an adjustment period for shareholders.

Should you buy the stock under $500?

As of Jan. 2, Class B shares of Berkshire Hathaway traded at roughly $497 per share. This also means Berkshire stock trades at about 185% of its tangible book value (TBV), or net worth. This is a key metric many investor use when valuing bank and insurance stocks, so it makes sense for Berkshire. During the past 10 years, Berkshire stock on average traded at 196% of its TBV, so you can buy Berkshire stock at a little bit of a discount.

While I can certainly understand that investors will miss Buffett, I also have confidence in Abel and the rest of senior management to carry the torch. Not only have they worked extensively with Buffett and learned from the Oracle of Omaha during several decades, but Buffett handpicked Abel, so investors should trust him.

Berkshire also operates several durable businesses with strong competitive moats, due to their size alone. Given that Berkshire is a mature company and one of the few with a $1 trillion market cap, it is unlikely to be a high-growth stock. However, I expect it will continue to generate strong long-term returns. Additionally, Berkshire's stock has served as a haven in recent years during times of market turbulence, making it a valuable addition to a multi-asset portfolio.

Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Chevron. The Motley Fool has a disclosure policy.