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Morningstar | Revisions to Berkshire's share repurchase program could see more cash returned to shareholders.

We think two big concerns--first, that Berkshire Hathaway's size will prevent it from growing at a decent clip in the future and, second, that company's shares will get pummeled once Warren Buffett no longer runs the show--have not only left some investors on the sidelines but has also kept the company's shares from expanding much beyond 1.5 times book value per share the past 10 years.While we believe Berkshire is unlikely to consistently increase its book value per share at a double-digit rate--a feat that the firm achieved six times during 2008-17--we think the company will continue to increase book value per share at a high-single-digit to low-double-digit rate of growth. This should leave results solidly and consistently above Berkshire's cost of capital, which is what we've come to expect from companies with wide economic moats.As for succession planning, we expect Buffett's three main roles--chairman, CEO, and investment manager--to be split after his retirement. Our long-standing view has been that Buffett's son, Howard Buffett, will serve as nonexecutive chairman and that Ted Weschler and Todd Combs will serve as co-investment managers of Berkshire's investment portfolio. We think there are two fine candidates for the CEO role--Ajit Jain and Greg Abel--both of whom would bring unique insights to the role; our preference would be to have Jain take control of all of Berkshire's insurance operations, while Abel (who has experience with both operations and acquisitions) fills the role of chief capital allocator.With investment opportunities few and far between, the company continues to build up large amounts of cash on its balance sheet, which we think will eventually need to be diverted more heavily to dividends and share repurchases. While Buffett has been clear about share repurchases being his preferred option (compared with dividends), meaningful buyback activity was unlikely to occur until Berkshire altered its share repurchase program. With that now done, it will be interesting to see if Berkshire can buy back enough stock and put enough capital to work in acquisitions and/or investments to keep cash balances from expanding.