All publicly traded companies hold annual meetings, but none are as closely monitored as the yearly conclave held in Nebraska by Berkshire Hathaway (BRK.A) (BRK.B). That’s likely to be the case with May 2 get together, because this will be the first annual meeting without Warren Buffett at the helm.
CEO Greg Abel, who formally stepped into that role earlier this year, is running the conglomerate. Since this is his first annual meeting leading the conglomerate, it’s possible more eyeballs than usual will be on Omaha. It is another opportunity for him to confirm that Berkshire is in good hands and that his management style is different from that of the legendary Buffett. That could bring early May opportunity with the Direxion Daily BRKB Bull 2X Shares (BRKU ).
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BRKU is designed to deliver 200% of the daily performance of Berkshire Hathaway’s Class B shares. The Direxion ETF may be a pertinent consideration for tactical traders over the near-term.
Abel Already Making His Mark
Many annual meetings are performative exercises or dog-and-pony shows for executives and large investors. However, with a new leader at the top of the Berkshire empire, this year’s get together is potentially noteworthy. That could spell opportunity with BRKU.
The meeting could be an opportunity for Abel to update investors on some of Berkshire’s equity holdings, some of which aren’t up to standard. The new Berkshire boss has already displayed a willingness to eliminate some of the firm’s equity holdings.
BRKU could receive a spark if Abel hints at plans for Berkshire’s massive cash stockpile. The stockpile is north of $370 billion and is sitting around collecting interest in T-bills. Shareholders would likely rejoice if Abel hinted at better forms of deploying that war chest.
“The environment in which they’re operating has shifted, or the way they’d like to operate, which is to continue to acquire companies and actually make big-scale investments in stocks. It’s a lot harder for them to do that than it was, say, 20 or 30 years ago,” noted Morningstar’s Gregg Warren.
Another point of emphasis at the Berkshire annual confab is how Abel intends to work with the company’s umbrella firms. Those include BNSF, Dairy Queen and Geico, among many others. Presenting a different leadership style, which he’s already done, could be a short-term catalyst for BRKU.
“From that perspective, those are things I think he’s probably identified because he started overseeing the noninsurance businesses in early 2018,” added Warren. “He talked to the managers, figured out where they were, and what their focus was. I think he’s always sort of held back on pushing anything harder. Really, he didn’t have the full authority because Buffett was still in charge. Now that he is in charge, I would expect to see some of that coming down a little bit harder.”
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