Categories: world

This is what happened last time Warren Buffet's Berkshire Hathaway bought back stock

Berkshire Hathaway Inc. invested perked up the Monday after Warren Buffet's investment arm showed a big jump in profit for…

Berkshire Hathaway Inc. invested perked up the Monday after Warren Buffet’s investment arm showed a big jump in profit for the third quarter and said it bought back some of its shares for the first time in six years.

B shares

BRK.B, + 5.09%

raised 4.6% in the afternoon trade against a sixth straight win and enough to speed the profits of their financial equals while Class A

BRK.A, + 5.70%

shares increased by 4.9%. Given how well the share has been done since last time the company repurchased shares, it is no wonder when Buffett invests in itself, investors listen.

The company reported this weekend net income for the quarter to September 30 as more than quadrupled to $ 1

8.54 billion from $ 4.07 billion. Since Berkshire Hathaway has adopted new accounting standards, earnings in the last quarter include $ 11.4 billion in unrealized gains and losses resulting from changes in fair values ​​of its equity investments, while earnings before January 2018 reported unrealized gains and losses in other comprehensive income [19659002] Missa not : Buffet’s Berkshire share has the best day for 7 years after the repurchase policy change.

Berkshire stressed that investors would not pay too much attention of $ 11.4 billion in investment profits and only reported them that they now have to do it:

“The amount of gains / losses in a particular quarter is usually meaningless and yielding earnings-per-share earnings that may be misleading to investors who have little or no knowledge of accounting rules. “

Perhaps it’s value for investors, like Berkshire Hathaway, in its quarterly registration with the Securities and Exchange Commission revealed that it repurchased approximately $ 928 million in its A and B shares in the quarter, something that has not been done since December 2012. The announcement comes after the company changed its repurchase policy in July to give more president and CEO Buffett and Vice Chairman Charlie Munger

The company said it bought 225 A shares at an average price of 312,806, 74 dollars and 4,139,292 shares in B shares of 207.09 USD, for a total cost of $ 927.57 million. This means that Buffett and Munger believe that the repurchase prices are below Berkshire’s “intrinsic value” based on the new repurchase policy.

These purchases have so far worked out in the short term, as the A shares traded over 323,600 SEK in afternoon trading Monday and B shares were 216 dollars.

FactSet, MarketWatch

In December 2012, Berkshire bought 9,475 A shares at an average price of $ 131,065.62 and 606,499 B shares of $ 88.76 for a total cost of approximately 1.30 billion dollars. Buffetts and Munger’s decision to repurchase stocks at that time came after the company changed its policy to allow them to pay up to 20% above book value from a previous limit of no more than 10%.

Since the end of 2012, the A shares have risen 141% and the B shares have risen approximately 141%. Unlike the SPDR Financial Select Sector Listed Fund

XLF, + 1.76%

of which Berkshire is the heaviest weighted component, has collected 101%, the S & P 500 index

SPX, + 0.58%

has increased 92% and Dow Jones Industrial Average

+ 0.76%

has risen 94%.

The day after Berkshire revealed previous purchases after March 1, 2013 close, A shares received 0.1% and Class B shares fell by 0.1%. Three months later, both the A shares and the B shares were 12%, while Dow was 8.3% better.

See also : Warren Buffet’s major venture on Apple has a Wall Street trader asking: Has he lost it?

Share
Published by
Faela