Berkshire Hathaway stock price: Here’s where American CEOs are wrong, says Buffett

Shares of Berkshire Hathaway (NYSE: BRK.A) are likely to open higher on Monday after Warren Buffett’s company reported strong earnings for the past quarter. 

Fundamental analysis: Net earnings soar, record buybacks

Berkshire reported operating income of $5.02 billion for the fourth quarter, up from $4.42 billion from a year ago. Operating earnings fell 9% to $21.92 billion, while net earnings soared 23% to $35.83 billion.

Berkshire Hathaway continued to buy back its stock in 2021, after purchasing a record amount of shares last year, according to the company’s annual letter published on Saturday. 

Warren Buffet’s conglomerate purchased about $9 billion of its own stock in the fourth quarter, amounting to a total of $24.7 billion the company bought in 2020.

Berkshire bought back roughly $9 billion in the third quarter, up from $5.1 billion it purchased in Q2. The conglomerate bought back a total of $5 billion of its stock in 2019.  

Warren Buffet pointed out that Berkshire initiates repurchase programs only when it believes the stock is below its intrinsic value. 

Technical analysis: Buyers take a step back

Shares A of Berkshire Hathaway touched a new all-time high on Thursday. The conglomerate’s stock surged 5% year-to-date, outstripping a 2% rally in the S&P 500. 

The price action came very close to tagging the long-term target of 127.2% Fibonacci price at $250.00. A rotation lower came amid a wider selloff in stocks, paving the way for Berkshire stock to fall about 4% off the highs. The nearby support is located at $236.00.

Summary

Berkshire Hathaway continued its share repurchase program in 2021 after buying back a record $24.7 billion in 2020, according to the conglomerate’s annual letter.