Berkshire Hathaway ‘s stock, dragged down by the recent market turmoil, has become cheaper than the level when the conglomerate started aggressively buying back its own shares four years ago. The conglomerate’s Class A stock fell more than 22% in the second quarter, down nearly 24% from its all-time high reached on March 28. The pullback coincided with a big sell-off in the broader market, which tumbled into a bear market after aggressive rate hikes from the Federal Reserve sparked fears of a recession. UBS’ Berkshire analyst Brian Meredith said after the recent sell-off, Berkshire’s stock is currently trading at around a 26% discount to its intrinsic value, which is more than the 22% average discount since the conglomerate resumed share repurchases in the third quarter of 2018. Meredith’s calculation used an estimated book value of Berkshire’s non-insurance operations, plus the value of its various balance sheet investments including its equity investment in Kraft Heinz, and subtracts deferred taxes on marketable securities. A combination of factors have made Berkshire’s stock cheaper. Besides the recent pullback in share prices, Berkshire’s various assets have increased in value drastically in recent years, compressing the multiple of the stock. Record buybacks Warren Buffett has supported Berkshire’s stock through an aggressive and consistent buyback program over the past few years. The conglomerate repurchased a record $27 billion of its own shares in 2021 as the “Oracle of Omaha” found few opportunities externally. The program authorized in 2018 allowed for buybacks at prices as high as 120% of book value, according to Stephen Biggar, Berkshire analyst at Argus. Buffett said back then that repurchases “make good sense” as appealing deals remained scarce. “Charlie and I have endured similar cash-heavy positions from time to time in the past. These periods are never pleasant; they are also never permanent,” Buffett wrote in his annual letter released in February 2022. “Fortunately, we have had a mildly attractive alternative during 2020 and 2021 for deploying capital.” Slowdown began In the first quarter, however, Berkshire’s stock buybacks slowed down to $3.2 billion from $6.9 billion in the fourth quarter of 2021 as share prices skyrocketed to a record high. The stock closed above half a million dollars for the first time in March with the multifaceted conglomerate benefiting from the economic recovery. The company also started to become more active with dealmaking and stock picking than it had been for a while. In late March, the company agreed to buy insurer Alleghany for $11.6 billion — marking Buffett’s biggest deal since 2016. Meanwhile, Berkshire continued its buying spree in the public markets. The conglomerate ramped up its bet on Occidental to nearly 20% as of the end of last week, a regulatory filing showed. Berkshire also acquired a new stake in HP this year. While the low share price presents a good opportunity for buybacks, it doesn’t mean that the conglomerate would increase repurchases dramatically if it keeps finding things to buy externally. “Mr. Buffett reported that Berkshire didn’t buy back any stock in April, probably reflecting both valuation and re-emerging external capital deployment opportunities,” said Meyer Shields, Berkshire analyst at KBW. Shields said he projects a total of $13.6 billion in buybacks this year. Buffett himself told shareholders at its annual meeting this year that he would prefer acquiring stakes in other companies to share repurchases. “If we have the choice of buying businesses that we like, or buying back stock — the controlling factor’s how much money we have — we’d rather buy businesses,” Buffett said in April in Omaha, Nebraska.