But is the stock still undervalued?


FRI, NOV 09, 2018


Buffett triggers $928 million Berkshire buyback 

Berkshire Hathaway found something to do with at least a small part of its mountains of cash, including the repurchase of its own shares. Analyst Jim Shanahan at Edward D. Jones tells CNBC.com it "sends a really strong signal to the market."


In August, Berkshire bought back about $70 million of Class A at an average price of $312,806.74 each and another $857 million of Class B shares at an average of $207.09. Note that no additional purchases were reported for September, and today the stocks are roughly 6% higher than those August prices.


It's the first Berkshire buyback in six years, and follows a new policy in July that eliminated obstacles to repurchasing its own stock.


It also bought other stocks, making net purchases of $12.6 billion in the third quarter. October's stock market declines may very well have provided Buffett with some buying opportunities.  We probably won't find out about any of those purchases until mid-February when Berkshire will be required to reveal its fourth quarter buying.


  • Barron's notes Berkshire made a quick $61 million on paper over two weeks with its IPO purchase of Brazilian payment processor StoneCo.
  • Warren Buffett came up a winner in a Nevada ballot question that Quartz characterizes as a battle with Sheldon Adelson. The casino magnate  spent about $22 million to support a measure that would have ended Berkshire subsidiary NV Energy's electricity monopoly. But the utility spent $63 million to oppose it, and the measure was soundly defeated.




Speaking of buybacks, during the 2018 Berkshire annual meeting, Buffett was asked about Apple's $100 billion stock buyback.


In this clip, he explains why when a company with an extraordinary product thinks its stock is undervalued, and doesn't see better opportunities elsewhere, he's delighted for it to buy back stock, and in the process boost Berkshire's stake.


But as Munger points out, they don't like every company's buyback. Some are "insane" and "immoral."



Berkshire Hathaway Class A shares closed at $329,665 Friday, up 6.3% over the previous four weeks, much of it due to a 5% gain Monday on news of the buyback. The shares are up 19.3% from one year ago.

Berkshire Hathaway Class B shares closed at $219.63, up 6.2% over the previous four weeks, and up 19.0 percent from one year ago.

The benchmark S&P 500 index closed at 2,781.01, up 0.5% over the previous four weeks, and up 7.6 percent from one year ago.



Please send any questions or comments to buffett@cnbc.com.

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