Stock Split Watch: Why These 2 Expensive Stocks Are Not Next in Line, and Why They Are Buys Anyway

Berkshire Hathaway and Booking Holdings are highlighted as strong investment opportunities despite their unlikelihood to execute stock splits, a common market catalyst. Berkshire Hathaway maintains its high share price (Class A at $761,800) in line with Warren Buffett's strategy to attract long-term investors, while Booking Holdings' CEO Glenn Fogel has indicated a similar preference, even with shares around $5,100. Both companies are deemed attractive due to robust fundamentals: Berkshire Hathaway benefits from a diversified portfolio and established leadership succession, while Booking Holdings reported strong Q3 results with 13% revenue growth to $9 billion and 9% net income growth to $2.7 billion, supported by network effects, travel tailwinds, and capital return programs.

Analysis

The article identifies Berkshire Hathaway (BRK.A, BRK.B) and Booking Holdings (BKNG) as strong investment opportunities, despite their high share prices and explicit disinterest in stock splits. Both Warren Buffett and Booking's CEO Glenn Fogel prioritize attracting long-term investors, deliberately avoiding splits that might draw short-term traders. This strategic positioning underscores a focus on fundamental value over market-driven catalysts.

Berkshire Hathaway, with Class A shares at $761,800, exhibits a robust financial foundation, comprising a diversified portfolio of subsidiaries, a significant equity portfolio including Apple, and substantial cash reserves. The company's well-defined leadership succession, featuring Greg Abel and seasoned investment lieutenants, ensures operational continuity and strategic stability, supporting its "buy" recommendation for long-term holders.

Booking Holdings, currently priced around $5,100 per share, reported strong Q3 financial results, with revenue up 13% year-over-year to $9 billion and net income rising 9% to $2.7 billion. The company leverages a strong network effect in its travel platform, benefits from long-term travel demand tailwinds, and invests in AI-powered initiatives. Its commitment to shareholder returns is further evidenced by a robust stock buyback program and a recently initiated dividend.

Key Decisions for Investors

• Investors should prioritize the strong fundamental performance and strategic management of Berkshire Hathaway and Booking Holdings over the absence of stock split catalysts.
• For greater accessibility, consider purchasing Class B shares of Berkshire Hathaway or utilizing fractional share options for both companies.
• Continuously monitor Booking Holdings' financial results and leverage of travel industry tailwinds, while observing Berkshire Hathaway's leadership continuity and capital deployment strategies.