Berkshire Hathaway’s Transition and Stock Outlook
Berkshire Hathaway’s Class B stock was created to make shares more attainable for individual investors.
After almost six decades, Warren Buffett, the famed investor, has stepped down as CEO of the company. Berkshire Hathaway’s stocks, denoted as BRK.A and BRK.B, have historically outperformed broader market benchmarks, making Buffett a figure often regarded as one of the greatest investors ever. While he will retain his role as chairman of the board, it’s clear this marks a new chapter for the company.
Buffett has appointed Greg Abel, a longtime Berkshire employee since 1999, as the new CEO. With these changes in leadership, potential investors might wonder if now is a good time to buy Berkshire Hathaway’s Class B shares, which are priced under $500.
The Company’s Strong Position
The introduction of Berkshire’s Class B stock in 1996 aimed to make stock options more accessible. Nowadays, with the availability of fractional shares—allowing investors to buy parts of Class A shares—the need for Class B shares isn’t as critical as before. Still, at around $744,100 for Class A shares, the Class B option feels quite affordable.
It’s important to acknowledge that Buffett’s absence and the influence he had could make the stock somewhat less appealing to investors initially. There have also been notable changes among senior executives, including the exit of Todd Combs, who played a significant role in investing a substantial portion of Berkshire’s portfolio and led GEICO’s insurance sector.
Nonetheless, Buffett leaves a strong legacy at Berkshire. The company runs sizable businesses that are hard to replicate. For instance, its insurance division reported profits of $22.6 billion in 2024. Additionally, Berkshire has a diverse portfolio across various industries, including railroads, energy, manufacturing, hospitality, and retail.
Berkshire manages the money collected through insurance premiums and invests it across multiple sectors. Its stock portfolio exceeds $300 billion, featuring significant holdings in companies like Apple, American Express, and Bank of America. Plus, by the end of Q3 2025, Berkshire’s balance sheet boasted over $377 billion in cash and liquid assets.
Some have speculated Buffett accumulated this cash reserve to ease Abel’s transition, anticipating a possible adjustment phase for shareholders.
Should I Buy Stocks Under $500?
As of January 2, the trading price for Berkshire Hathaway’s Class B stock was around $497 per share. This indicates that the stock is valued at tangible book value (TBV), or approximately 185% of its net assets. This valuation is significant, particularly for investors considering banking and insurance stocks. Historically, over the past decade, Berkshire shares have traded at about 196% of TBV, so there’s a slight discount available now.
While it’s understandable that investors may feel the absence of Buffett, there is strong confidence in Abel and the senior management team to guide the company forward. Having collaborated closely with Buffett over many years, they have gained invaluable experience. Furthermore, Buffett’s choice of Abel suggests that investors should feel reassured.
Berkshire runs multiple enduring businesses that have solid competitive advantages uniquely tied to their scale. While it isn’t likely to be a high-growth stock—being a mature company worth over $1 trillion—it is expected to generate robust long-term returns. Moreover, Berkshire has proven to be a stable asset during market volatility, making it a sound choice for a diversified portfolio.
