Berkshire Hathaway broadens its presence in Japan with additional investments in Mitsubishi Corporation
Berkshire Hathaway, the conglomerate led by legendary investor Warren Buffett, has been making headlines recently as the market eagerly awaits the transition from Buffett to his successor, Greg Abel.
In Q2, the company demonstrated careful navigation, but the lack of major acquisitions and a cautious stance in the high-valued market have raised some eyebrows. Berkshire is currently sitting on a record $344 billion in cash, a figure that has been growing steadily.
One of the most significant moves Berkshire has made recently is increasing its stake in Japan's biggest trading company, Mitsubishi. The company now owns 10.23% of Mitsubishi, a significant increase from its 9.74% stake in March. This increase was made through Berkshire's insurance subsidiary, National Indemnity Company.
Berkshire's wider Japan strategy includes positions in Sumitomo, Itochu, Marubeni, Mitsui, and Mitsubishi. Warren Buffett first bought into these trading houses in 2020 and has gradually added to these holdings, especially during periods of market softness.
The meeting between Buffett and CSX CEO, during which no acquisition was confirmed, has added to the speculation surrounding the shift from Buffett to Abel. Abel, who is expected to become CEO once Buffett steps down at the end of 2025, was present at the meeting.
Despite some shareholders' concerns about the declining net income, flat revenue growth, and weakening insurance profits, a Mitsubishi spokesperson confirmed that Berkshire continues to believe in the firm's medium to long-term growth.
In a more positive development, CSX and BNSF Railway, which Berkshire owns, announced a partnership to offer new coast-to-coast freight service across the U.S.
Twenty-nine members of the Simply Wall St Community have estimated that Berkshire Hathaway could be undervalued by up to 30%. However, the shift from Buffett to Abel remains a core near-term risk.
As the transition unfolds, investors will be closely watching to see how much of Warren's strategy Greg Abel will carry forward and how soon the handover will happen.
