Berkshire Hathaway's Cash Pile and Potential Investment in Walt Disney
In Q2 of 2024, Berkshire Hathaway spent $20 billion on equity purchases, including a significant increase in its stake in Alphabet. This marked the first time since late 2022 that the conglomerate was a net buyer of stocks. With over $359 billion in cash reserves, there is speculation about how Greg Abel, Warren Buffett's successor, might allocate these funds. Walt Disney has been suggested as a potential target for investment due to its attractive valuation and strong economic moat from intellectual property assets like characters and franchises. The stock trades at a forward P/E of 14.3 compared to the S&P 500’s 21, making it an appealing value play. Despite Disney's solid fundamentals—including double-digit earnings growth projections—there is no indication that Berkshire Hathaway will invest in September or soon after. Concerns about declining legacy TV operations and uncertainty around streaming industry risks may be deterring the move.
Tickers: $DIS
Topics: Alphabet Berkshire Hathaway Cash Holdings Stock Purchases Walt Disney