Warren Buffett spent more money buying back Berkshire Hathaway Inc. s stock in the past few years than he did Amassing his biggest equity bet on Apple Inc.
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The Rising Pacific forces a native village to move. He spent more than $20 billion more to repurchasing its own stock during the middle of the year, but did not deploy Apple stake through the end of last year. Since the end of September, Buffett spent about $51 billion in buybacks, and appears to have continued to snap up at least $1.7 billion of stock.
Buffett, Berkshire's chairman and chief executive officer, built Berkshire into a fast-growing conglomerate valued at more than $650 billion, but that immense size on his need for that he described as an elephant-sized acquisition to ramp up Berkshire's growth. Buffett has been outbid at times by aggressive private equity firms, as he has been trying to buy a new deal hunt. There are more than $20 billion of repurchases so far this year, which left him increasingly relying on buybacks, as a way to put some of the Berkshire's record cash pile to work.
The bull case would say they bought back $20 billion of their stock because they are confident in their future outlook and that should be a catalyst for the stock, and my sense is that it probably will, Cathy Seifert, an analyst at CFRA Research, said. The bear case, which is relevant to point out, is that a company that has had the need to make additional acquisitions, and they haven't been able to do that. A CEO who had since stopped buybacks was a marked shift. For years, Buffett preferred large deals and spending money on repurchasing Berkshire shares over repurchasing Berkshire s own shares. The company s board lifted a cap on buybacks in 2018, giving Buffett and his longtime business partner, Charlie Munger, more flexibility to parcel out profits.
A stake valued at more than 12 billion dollars at the end of September, berkshire's buybacks have surpassed even the largest holding, Apple Inc. The company has spent just $31 billion buying Apple shares since it began accumulating that stake in 2016 through the end of 2020, according to the most recent data available.
We believe Warren Buffett s significant share repurchases show his conservatism as rising valuations make deals he may find attractive more scarce.
The buyback activity, while it was significant in size, hasn't been enough to meaningfully Whittle away some of the conglomerate s cash. Berkshire ended September with a record 149.2 billion dollars in its coffers. While investors often want management to remain disciplined on when and how it spends the money, the swelling cash pile is somewhat disappointing, according to Edward Jones analyst Jim Shanahan.
Money balances increased after buybacks were fine, according to Shanahan. The price of cash is close to $150 billion. That certainly was unexpected earlier this calendar year, I would have thought they would have been able to manage that lower with a combination of investments, acquisitions and buybacks. The business in Omaha, Nebraska, which reported third-quarter earnings Saturday, posted an 18% gain in operating profit during that period, which was made up of record railroad earnings and strong results from its energy businesses. That helped offset even more underwriting losses at its group of insurers, which have been hit by catastrophes such as Hurricane Ida and more frequent claims from its drivers at auto insurer Geico.
The filing said that Berkshire bought back at least $1.7 billion in stock from September to October 27. Empire Financial Research analyst Whitney Tilson, who attended the Berkshire annual meeting for more than two decades, applauded the buyback, but said he would still prefer to see Buffett find the next lucrative stock bet.
If Buffett could find another Apple, I rather have him allocate to that, Tilson said. When you'reдрowning in cash, buying back Berkshire stock makes sense. None All Those 23 andMe Spit Tests Were Part of a Bigger Plan
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