Greg Abel's Berkshire Hathaway Repurchased $4.5 Billion of Its Own Stock Last Quarter. Is This a Bullish Signal for Investors?

Greg Abel took over as CEO of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) at the start of 2026. Former CEO Warren Buffett left Abel a huge gift: nearly $400 billion in cash on the company's balance sheet. Abel has put some of that cash to work buying Taylor Morrison Home, and some has been spent on publicly traded stock investments. However, Abel has also decided to buy back Berkshire Hathaway stock. That could be a positive sign. Here's why.

Berkshire Hathaway doesn't repurchase shares very often

Under Warren Buffett, Berkshire Hathaway didn't make a habit of buying back stock. The world-famous investor preferred to put cash to work by buying shares in other companies or buying companies outright. When he did buy back Berkshire Hathaway stock, it was because he believed the shares were undervalued.

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This dynamic is clearly explained in the company's 2025 10k, where the company states: "Berkshire's common stock repurchase program currently permits Berkshire to repurchase shares any time that Berkshire's Chief Executive Officer, after consultation with the Chairman of the Board, believes that the repurchase price is below Berkshire's intrinsic value, conservatively determined." The only limit on repurchase activity is that it can't reduce the company's cash and short-term investment balance below $30 billion.

Some market watchers had hypothesized that Berkshire Hathaway bought as much as $11 billion of its own stock in the second quarter, but the real number turned out to be roughly $4.5 billion. That said, the number was still quite large and, even then, given the huge cash balance the company has, it didn't put the company anywhere near the $30 billion cash limitation.

The size of the buyback is less important than the buyback itself

If Berkshire Hathaway had bought back $100,000 of its own stock, it wouldn't be a big deal. But given that the dollar amount was material, it is important to revisit the logic of the company's buyback plan. Berkshire Hathaway repurchases its own shares only if the CEO and the chairman of the board believe the stock is cheap.

That means Greg Abel had to consult with Warren Buffett before making the repurchases, and they both agreed that Berkshire Hathaway's shares looked attractively priced. If you are considering buying Berkshire Hathaway stock, this could be your signal to take the plunge. While the stock has risen a few percentage points since its low in the second quarter of 2026, the long-term investment appeal of this diversified conglomerate remains material. That Abel bought back stock in the second quarter is probably more important than the relatively modest short-term stock price advance since then.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.