Berkshire Hathaway Stock Lags, Is It Still a Buy? - May 25

The Story

Berkshire Hathaway has lagged its industry over the past three months while sitting on more than $370 billion in cash, and management is directing capital into Japan trading houses and building out BHE renewables. US markets were closed Monday, May 25 for Memorial Day, and the last trading day was Friday, May 22.

Why It Matters For Your Portfolio

• Three-month performance: The stock has trailed peers over a three-month window, which can dent momentum for growth-oriented positions and affect relative performance in diversified portfolios.
• Cash cushion: Berkshire’s $370B+ cash balance provides capital flexibility, which could underwrite acquisitions or share buybacks and reduce short-term liquidity risk for large-cap holdings.
• Insurance float: Management continues to leverage insurance float to fund investments, a recurring source of capital that can support long-term returns but may delay near-term earnings lift.
• Strategic reallocation: Moves into Japan trading houses and expansion of BHE renewables change business mix and exposure, a factor income and value investors may want to monitor for shifts in cash flow and regulatory risk.

The Trade

Long-term, value-minded investors may track capital-allocation updates and BHE renewables progress, while traders should watch for a reversal in three-month momentum and any announcements tied to the cash balance. Key catalysts to watch are Berkshire’s public capital-allocation disclosures and its next quarterly report, along with industry performance that could narrow or widen the three-month gap.