Confluence Dumps 42,203 BRK-B Shares in Q2

Confluence Investment Management LLC disclosed a reduction in its Berkshire Hathaway (BRK.B) exposure, selling 42,203 shares worth $21.49 million during the quarter ended June 30, 2025. Following the transaction, the fund retains 101,968 shares valued at $49.53 million, with BRK.B remaining a mid-sized holding representing 0.70% of its reported equity AUM.

Analysis

Confluence Investment Management LLC has materially reduced its stake in Berkshire Hathaway (BRK.B), selling 42,203 shares for $21.49 million during the second quarter of 2025. This transaction represents a significant portfolio adjustment, although the fund retains a $49.53 million position, which constitutes 0.70% of its equity AUM. The sale occurs against a complex backdrop for Berkshire. While the stock has outperformed the S&P 500 by 5.2 percentage points over the past year with a 19.14% gain, it has recently fallen 11.5% and trades 10.53% below its 52-week high, a decline linked to the announcement of Warren Buffett's upcoming departure as CEO at the end of 2025. Fundamentally, Berkshire presents a dual narrative: it generated record operating earnings of $47.4 billion in 2024 and sits on a formidable cash balance of nearly $350 billion. However, this is contrasted by a concerning five-year revenue compound annual growth rate of -11.52% and a high forward price-to-earnings ratio of 62.40, suggesting valuation may be stretched relative to recent top-line performance. The impending leadership transition to Greg Abel, combined with these mixed financial metrics, creates a pivotal moment for the conglomerate.

Key Decisions for Investors

• Given the recent 11.5% stock price decline attributed to the CEO transition, long-term investors may consider this a strategic entry point, capitalizing on the company's resilient business model and massive $350 billion cash reserve for future deployment.
• Investors should closely monitor the incoming CEO's capital allocation strategy and its impact on reversing the negative five-year revenue CAGR, as the high forward P/E of 62.40 implies significant market expectations for future growth.
• Following the lead of Confluence Investment Management, current holders who have benefited from the 19.14% twelve-month gain might consider trimming positions to de-risk and realize profits ahead of the management change, while maintaining a core holding.