There’s a changing of the guard in the world of investing, and investors are paying attention. After more than six decades at the helm, Warren Buffett is stepping down from Berkshire Hathaway (NYSE:BRK.B)(NYSE:BRK.A). While the news isn’t entirely surprising, Buffett is 94 years old, it still marks the end of an era. He’s long been the poster child for buy-and-hold investing, value discipline, and calm during market storms. But now, it’s time for someone new to steer the US$900 billion ship. That someone is Greg Abel, a Canadian executive who’s been quietly managing much of Berkshire’s non-insurance business for years.
The new sheriff in town
Born and raised in Edmonton, Abel is a low-key leader with deep experience in energy and utilities. He joined Berkshire in 2000 and worked his way up to vice chair of non-insurance operations. He oversees companies like BNSF Railway, Berkshire Hathaway Energy, and Dairy Queen, and has been widely regarded as Buffett’s successor for a few years now. The transition will become official by the end of 2025, with Buffett stepping into a more advisory role, according to sources close to the company.
While many investors are still confident in the future of Berkshire Hathaway under Abel, others are starting to trim their positions. There’s a natural tendency to reassess when a legendary leader retires. Some high-net-worth investors and fund managers are now looking for fresh opportunities outside of Berkshire. Interestingly, some are even turning their focus back to Canada, specifically to the TSX, where companies like CES Energy Solutions (TSX: CEU) are starting to catch their eye.
Why CES
CES Energy Solutions isn’t a household name, but it’s making waves in the oil and gas services sector. Based in Calgary, the TSX stock provides consumable chemical solutions for drilling and production across North America. That might sound dry, but it’s actually a high-margin business with steady demand. Oil producers rely on chemical solutions to keep drilling efficient, safe, and profitable, and CES has carved out a strong position in that niche.
In its most recent earnings report for the fourth quarter of 2024, CES delivered revenue of $605.4 million, up 9.5% from the same period last year. That’s solid growth in an industry that has faced its share of volatility. The TSX stock also posted record earnings before interest, taxes, depreciation and amortization (EBITDA) of $103.2 million, representing a 22% increase and a margin of 17.1%. These aren’t just nice numbers. They signal strength, especially in a sector where cost control and efficiency matter more than ever.
Earnings per share (EPS) came in at $0.18, which was slightly below analysts’ expectations of $0.22, but the TSX stock’s revenue and EBITDA growth more than made up for the miss. CES is showing that it knows how to grow in a disciplined way, while also rewarding shareholders through a forward dividend yield of 2.7%. Beyond the numbers, CES has a few intangibles that make it stand out. Its operations are diversified across Canada and the U.S., and it continues to invest in technology and innovation. The management team has a strong track record of execution, and its balance sheet is in solid shape. The energy producer also benefits from the ongoing rebound in drilling activity, particularly in Western Canada.
Bottom line
For Canadian investors thinking about rebalancing their portfolios, CES offers an interesting opportunity. It’s got growth potential, pays a dividend, and operates in a sector that still has room to run, even as the world transitions to renewables. And with some big-name investors moving money out of Berkshire and into under-the-radar names, CES might be on the verge of broader recognition.
Buffett’s retirement might mark the end of an era, but it also opens the door to a new wave of thinking – and investing. If you’re looking for a made-in-Canada stock to hold, CES Energy Solutions is one to watch. It’s not trying to be the next Berkshire. But it might just be the right kind of company for what comes next.
