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What Berkshire Could Do With Its Growing Cash Hoard

Gregg Warren says share repurchases and dividends as the only way for Berkshire to meaningfully reduce its cash balances in the near term.

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Greggory Warren: A big topic for us of late with regard to wide-moat rated Berkshire Hathaway is the company's growing cash hoard and the changes it could produce in capital allocation decisions longer term.

With the firm expected to generate $5 billion to $10 billion in quarterly free cash flows going forward, and valuations for both public and private businesses elevated, we envision Berkshire surpassing the $150 billion balance sheet cash threshold that CEO Warren Buffett said would be difficult for him to defend longer term.

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Greggory Warren does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.