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- Warren Buffett's Berkshire Hathaway finally found stocks worth buying in 2022, going by its annual report.
- The company spent a record $68 billion on stocks, or $34 billion on a net basis, it said Saturday.
- Berkshire slashed its share repurchases to $8 billion, but its cash pile still shrunk significantly.
Warren Buffett's Berkshire Hathaway spent nearly $70 billion on stocks in 2022, its latest annual report shows. Meanwhile, the famed investor's company slashed its share buybacks, but still deployed a chunk of its cash reserves.
Berkshire poured an unprecedented $68 billion into stocks over the course of the year, according to the report published Saturday.
At the same time, it only sold $34 billion worth, meaning it purchased a net $34 billion of stocks in 2022. Its biggest bets included Chevron and Occidental Petroleum.
The conglomerate's previous record for annual spending on stocks was $43 billion in 2018, or $24 billion on a net basis, according to a Markets Insider analysis of data going back to 1993. It was a net seller of stocks in both 2020 and 2021.
It's worth noting that Berkshire invested less than $2 billion in stocks last quarter and sold about $16 billion worth, meaning it offloaded almost $15 billion of shares in the period.
The downshift in spending last quarter could mean Berkshire's stock-buying spree is over for now.
Buffett and his team struggled to find bargains during the first two years of the pandemic, as stock prices surged and private equity firms and SPACs bid up the price of acquisitions. Armed with plenty of cash but facing a tough backdrop, they opted to ramp up their stock buybacks during that period.
However, they clearly found some deals in 2022, leading them to buy more stocks and repurchase fewer Berkshire shares. After spending $25 billion on stock buybacks in 2020, and a record $27 billion in 2021, they only laid out about $8 billion last year.
Moreover, the investor struck a deal to buy Alleghany in March last year, and completed the $12 billion acquisition in October.
Berkshire's slew of stock sales last quarter fueled a $20 billion increase in its cash pile in three months, to about $129 billion as of December 31. However, that was still down from $147 billion at the end of 2021, reflecting the company's stock purchases, continued buybacks, and Alleghany acquisition last year.
The conglomerate's revenue grew by 9% to $302 billion in 2022. Yet the value of its investments plunged by $68 billion on paper, swinging Berkshire from a pretax profit of $112 billion in 2021, to a $31 billion loss last year.
More positively, Berkshire's operating income rose by 7% to about $35 billion in 2022. Buffett's company recorded higher profits from its insurance, manufacturing, and service and retailing divisions. Those gains were partly offset by slimmer profits from its railroad and energy businesses.