Whitney tilson sent us an email about his thoughts on the latest Berkshire Hathaway buyback. Below are his notes and updated presentation on Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B)’s valuation.
1) Big news from Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) this morning – it raised the share repurchase limit from 1.1x book to 1.2x and made a $1.2 BILLION repurchase in ONE transaction!
FOR IMMEDIATE RELEASE December 12, 2012
Omaha, NE (NYSE: BRK.A; BRK.B)—Berkshire Hathaway has purchased 9,200 of its Class A
shares at $131,000 per share from the estate of a long-time shareholder. The Board of Directors
authorized this purchase coincident with raising the price limit for repurchases to 120% of book
value. Berkshire may purchase additional shares in the market or through direct offerings at no
more than 120% of book value.
Warren Buffett just put a floor on the stock of $134,000 (1.2x end of Q3 book value of $111,718 is $134,062) – yet right now it’s trading for $134,000. Go figure. Needless to say, I’m even happier having this as my largest position – and added to it this morning the moment I saw the news.
Below is our updated Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) slide deck (it’s also posted at www.tilsonfunds.com/BRK.pdf). We peg intrinsic value at $180,000.