Is Now the Time to Buy Berkshire Hathaway Class B Shares Before the Buffett Era Ends?

The end of Warren Buffett's era as CEO of Berkshire Hathaway marks a pivotal moment for long-term value investors. With Greg Abel set to assume the helm in 2026, the question looms: Is this the right time to buy Berkshire Hathaway Class B shares (BRK-B) before the transition? To answer this, we must dissect the company's financial health, the implications of its leadership shift, and the enduring principles of value investing that have defined its legacy.

Financial Fundamentals: A Mixed Picture

Berkshire Hathaway Class B shares currently trade at a price-to-earnings (P/E) ratio of 15.89, calculated using a trailing twelve months (TTM) earnings per share (EPS) of $31.27 and a stock price of $496.85 according to financial analysis. This ratio is 23% below its 10-year historical average of 20.65, suggesting the stock may be undervalued relative to its long-term trend. Additionally, the shares trade at approximately 185% of the company's tangible book value (TBV), a slight discount to the 10-year average of 196% of TBV as reported by market data. These metrics hint at a potential buying opportunity for patient investors, though the absence of a dividend yield and limited details on Q4 2025 revenue complicate immediate valuation assessments.

The company's $1.07 trillion market cap according to market analysis and $381.6 billion cash reserve as reported by CNBC underscore its financial resilience. However, the recent 11.5% stock price decline since Buffett's retirement announcement reflects investor uncertainty, often termed a "succession discount" in the market according to Investopedia.

Leadership Transition: Continuity or Change?

Greg Abel's succession plan is a masterclass in institutional continuity. Buffett's six-decade tenure, marked by a 19.9% annualized return, has been meticulously handed over to Abel, who has overseen non-insurance operations since 2018. Buffett's insistence that "everything will be the same" under Abel's leadership as investors have noted is echoed in the company's decentralized structure and long-term capital allocation philosophy. Yet, subtle shifts are emerging.

Abel's operational discipline and experience in renewable energy and infrastructure suggest a potential pivot toward these sectors according to market reports. Unlike Buffett's hands-off approach, Abel is expected to adopt a more active management style, as analysts suggest, optimizing underperforming businesses and deploying cash reserves more aggressively. This could enhance operational efficiency but may also introduce new risks if strategic pivots misfire.

The departure of Todd Combs, one of Berkshire's two investment managers, has left Ted Weschler as the sole steward of the $311 billion stock portfolio as reported by Investopedia. While Weschler's track record is solid, his recent underperformance relative to the S&P 500 has raised eyebrows. This shift in stewardship adds another layer of uncertainty for investors accustomed to Buffett's and Combs' complementary expertise.

Historical Precedents: Lessons from the Past

Leadership transitions in value-driven companies often test the durability of their investment theses. For instance, Steve Jobs' return to Apple in the 1990s catalyzed a strategic rebirth, while Howard Schultz's 2008 comeback at Starbucks revitalized its customer-centric model as market analysts have observed. These cases highlight how new leadership can adapt without abandoning core principles.

Berkshire's transition appears to follow a similar playbook. Abel's deep integration into the company's DNA-spanning over two decades-suggests a smooth handover. The creation of new roles, such as a General Counsel and a dedicated division for consumer operations according to market analysis, signals a move toward institutionalization but does not erode the company's long-term orientation.

Abel vs. Buffett: A Nuanced Evolution

While Abel's investment philosophy aligns closely with Buffett's value-driven ethos, there are nuances. Buffett's reluctance to invest in technology and AI-evidenced by missed opportunities in Amazon and Alphabet according to financial analysis-contrasts with Abel's openness to these sectors if valuations are attractive. This could diversify Berkshire's portfolio but may also challenge its traditional focus on durable, cash-generative businesses.

Moreover, Abel's hands-on management style may lead to tighter cost controls and operational improvements, potentially boosting margins in underperforming subsidiaries. However, this approach diverges from Buffett's trust in decentralized, independent managers-a hallmark of Berkshire's culture as noted by financial analysts.

Is Now the Time to Buy?

For long-term value investors, the answer hinges on three factors: 1. Valuation: The current P/E ratio and TBV discount suggest undervaluation, particularly if Abel can unlock hidden value in the cash reserve or underperforming assets. 2. Strategic Continuity: Buffett's principles of disciplined capital allocation and long-term thinking remain intact, providing a stable foundation. 3. Risk Tolerance: The succession discount reflects market skepticism, but historical precedents show that well-prepared transitions can outperform expectations.

Berkshire's $170 billion cash hoard according to financial reports and diversified operating businesses (e.g., Apple, American Express) offer a margin of safety. However, investors must weigh the potential for operational efficiency against the risks of strategic overreach in new sectors.

Conclusion

The Buffett era's end is not a death knell for Berkshire Hathaway but a transition to a new chapter. For patient investors who prioritize long-term value creation over short-term volatility, Class B shares present an intriguing opportunity. While Abel's leadership introduces new variables, the company's institutional strength, financial health, and cultural continuity suggest that the core investment thesis remains intact. As Buffett once wrote, "Your goal is to purchase a dollar for 40 cents." At current valuations, Berkshire Hathaway Class B shares may offer just that.