Buffett's Berkshire is set to outperform as it posted a better-than-feared 2020, continues buybacks

Key Points
  • 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.
Warren Buffett
Gerard Miller | CNBC

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.

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