- Berkshire Hathaway posted a better-than-feared 2020 as many of its key businesses held up well and Warren Buffett's buyback strategy paid off.
- Many view Berkshire as a proxy for the U.S. economy as it owns a hodge-podge of large businesses including insurance, transportation, utility, retail and manufacturing.
- As the economy reopens, analysts are optimistic that the conglomerate could see accelerated growth in many businesses.
- Analysts cheered the positive commentary around sustained buybacks as they believe the repurchase program is a good use of capital when the environment for major acquisitions is not ideal.
Berkshire Hathaway weathered the pandemic just fine thanks to the resilience of its businesses and record buybacks in lieu of deal-making, and the stage appears set for the conglomerate to outperform this year, analysts and investors said.
While Warren Buffett's annual letter was a letdown to some hoping for a big acquisition announcement or market pronouncement, his conglomerate's performance speaks for itself. Revenues totaled $245.5 billion in 2020, only a 3.5% year-over-year decline despite the pandemic damage. Berkshire shares have wiped out 2020 losses and hit a new record high on the back of nearly $25 billion share repurchases as well as strong gains in its equity portfolio.
The 'B' shares were up 3% on Monday following the earnings and letter release on Saturday, approaching a new high.