Wednesday close: $190,499.50 off $3500 on the day and down from $196K on Jan. 7.
From Bloomberg, Jan. 6:
- Shares approach threshold at which he would make repurchases
- Billionaire's last buyback announcment came in December 2012
Berkshire Hathaway Inc.’s stock slump over the past year has moved shares closer to the point where Chairman Warren Buffett says they’re a steal.
Book value, a measure of assets minus liabilities, probably climbed to $154,292 per share at the end of 2015, according to an estimate from Keefe Bruyette & Woods. Class A shares changed hands for $196,260 at 11:25 a.m. in New York Wednesday, or just 27 percent higher than the estimate. The company has said it’ll buy back stock for a premium of no more than 20 percent.
Buffett, 85, largely avoided share repurchases as he built Berkshire from a struggling textile maker into a sprawling conglomerate through investments and acquisitions. The board added buybacks to his toolkit in 2011. The policy helped set a floor under the stock and provided a pathway to retire some shares held by investors seeking to exit large holdings that they’ve held for decades
A buyback would be “terrific,” said Tom Russo, who oversees about $10 billion including Berkshire shares at Gardner Russo & Gardner. It would help “mop up shares that are in awkward hands.”
While the stock has soared during Buffett’s half-century running the company -- making the chairman and many of his early backers rich -- last year was a struggle. The shares fell 12 percent in 2015 and dropped another 0.8 percent this year.HT: Value Investing World
Three of Buffett’s big stock picks -- Wal-Mart Stores Inc., American Express Co. and International Business Machines Corp. -- lagged behind the Standard & Poor’s 500 Index last year. And operating earnings were flat through the first nine months of 2015. The company hasn’t reported fourth-quarter results.
Berkshire doesn’t pay a dividend, which puts investors under pressure to sell stock if they need income from their holdings. The last time Buffett announced a repurchase was in late 2012, when his company spent more than $1 billion on buybacks, largely from the estate of a long-time shareholder who wasn’t identified.
Still, there may be limits to how much cash Buffett is prepared to spend, even if the stock falls. S&P is reviewing whether to cut Berkshire’s credit rating amid an examination of how the company will pay for its planned purchase of aerospace-equipment maker Precision Castparts Corp. Buffett has said that he sold some stocks in 2015 partly to help pay for the $32 billion deal.
In a letter to investors last year, Buffett set the stage for much more-extensive buybacks. A decade or two in the future, he wrote, the company’s earnings will be so great that it won’t be possible to intelligently deploy all the funds back into the business....MORE