SAN FRANCISCO (MarketWatch) � In a first for Berkshire Hathaway Inc.�s annual shareholder meeting, Warren Buffett will field questions from a trio of analysts who follow its stock.Click to Play What investors expect from Berkshire meeting
Will Warren Buffett discuss his health and a possible successor at this weekend's Berkshire Hathaway's shareholders meeting? Rick Brooks discuss these and other investor questions on the News Hub. Photo: AP.
Though each of the three panelists in Omaha, Neb., this weekend is bullish on the shares � another analyst with a �hold� rating says he wasn�t tapped for the panel � they are not expected to shy away from controversial topics.
While Buffett still has legions of true believers, many investors are concerned about the chairman and chief executive�s health and succession plans; Berkshire�s BRK.A BRK.B �underperforming stock price; and the status of this traditional holding company at a time investors are captivated by Apple Inc., Facebook Inc. and other digital darlings in the market.
�Now that Mr. Buffett has revealed health problems, I think investors will first want to be reassured that he still has the stamina to run the company, is still on top of his game, still is enthused about Berkshire and feels well enough to run the company another several years,� said Tim Vick, senior portfolio manager at Sanibel Captiva Trust Co.
�Longtime investors have taken for granted that Buffett would always be there for them, and that has made his presence and his health a more important matter to shareholders than the company�s near-term financial performance,� he added.
/quotes/zigman/219651/quotes/nls/brk.a BRK.A 123,898, -912.43, -0.73% /quotes/zigman/583979/quotes/nls/brk.b BRK.B 82.54, -0.68, -0.82% /quotes/zigman/3870025 SPX 1,354.68, -12.90, -0.94% Berkshire Hathaway stock has trailed the S&P 500 over the past three years.
Buffett revealed last month that he has been diagnosed with early-stage prostate cancer and will undergo radiation treatment for two months starting in mid-July.
�The good news is that I�ve been told by my doctors that my condition is not remotely life-threatening or even debilitating in any meaningful way,� he said at the time.Investing icon
Shareholders will expect Buffett to act quickly this weekend to reinforce that upbeat message about his health and to address succession plans, so these sensitive matters won�t distract from the agenda.
�He will try to address his health problems early in the meeting as best he can, then move on,� Vick said. �That has been the pattern at annual meetings in the past. He doesn�t dodge these issues, but always confronts them honestly and in ways that satisfy shareholders.�
The thousands of Berkshire shareholders gathering in Omaha this weekend have come to expect no less from Buffett. From humble beginnings in the mid-1960s, Buffett built Berkshire into a multibillion-dollar holding company with interests in diverse industries � including insurance, banking, railroads, media, jewelry, fast food and furniture. It is the world�s eighth-largest public company based on a combination of sales, profits, assets and market value, according to Forbes.
Key investments in the Berkshire stable include Coca-Cola Co. KO , International Business Machines Corp. IBM , American Express Co. AXP �and Wells Fargo & Co. WFC �Such positions give Berkshire itself, with a current market value of around $200 billion, certain qualities of a large-cap value mutual fund.
Indeed, Buffett, dubbed the �Oracle of Omaha,� has become synonymous with investing acumen and shrewd deal-making.
�Over the last 45 years, the annualized return on book value [for Berkshire] has been 20% relative to say, a 9% return for the S&P 500 [Index]. So, definitely he�s kind of the special sauce that makes Berkshire a wide-moat firm,� wrote Gregg Warren, a senior equity analyst at Morningstar, in a research report.
While Buffett�s value-focused investment style isn�t always in favor when it comes to Berkshire�s stock performance, Buffett is held in such high esteem that his investment in a company carries significant clout.