(Bloomberg) — Warren Buffett slowed his roll.
Despite having more than $144 billion of funds at his disposal, the Berkshire Hathaway Inc. chief executive officer ended up taking a step back with his capital deployment during the second quarter. He repurchased just $6 billion of Berkshire stock, the lowest amount of buybacks since the middle of 2020. He was a net seller of other stocks for the third quarter in a row, according to the conglomerate’s second-quarter earnings released Saturday.
In recent years, Buffett’s been faced with a high-class problem: Too much cash and too few opportunities. He’s been under pressure to do a large deal to help supercharge the company’s growth but has come up short with well-priced and attractive options, leading Berkshire to spend even more funds buying back its stock. But now, he’s in more of a bind. Berkshire stock, already a challenge because of its lack of liquidity, has rallied in recent months, and the broader stock market has also become more pricey, with the S&P 500 Index climbing to new highs. “They’re kind of between a rock and a hard place,” Cathy Seifert, an analyst at CFRA Research, said in a phone interview. “Against that backdrop, I think the level of buybacks was prudent and appropriate.” Still, for an executive who previously shunned buybacks in favor of other ways of deploying capital, Buffett’s $6 billion of repurchases in the second quarter ranks as the fourth-biggest quarter since Berkshire began buying back more stock in 2018.
On a net basis, Berkshire sold just $1.1 billion of other stocks during the period, the lowest amount of net sales in the past three quarters. According to a regulatory filing Saturday, those sales appear to have come mainly from a decrease in its group of commercial, industrial, and other stocks. Berkshire is set to report its specific stock changes in a filing later this month. Berkshire shareholder Tom Russo deemed the move as bright given the overall level of the stock market.