Mr. Buffet recently revealed that Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) will be buying back stock by as much as 110% of their book value. This is after the company’s stock fell by 17% this year, and the management says that they are currently undervalued. The CEO said that by buying the stock the back, they will be increasing the intrinsic value of each share that they hold.
Mr. Buffet who recently turned 81, opted to use the company’s profits to purchase securities and companies, and said in a recent statement that the firm’s hoard of cash would make it hard to invest proceeds that they had. Analysts are of the opinion that Mr. Buffet thinks Berkshire stock is cheap, and is the reason he is choosing to put his money elsewhere.
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Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) is a large company and straddles various parts of the American economy. The firm holds more than $100 billion in investments, and some of its major holdings include stakes in The Coca-Cola Company (NYSE:KO), 8.8%, a stake in icons in the blue chip industry like American Express Company (NYSE:AXP), 13%, and even stakes in Wells Fargo & Company (NYSE:WFC), 7.6%, and International Business Machines Corp. (NYSE:IBM), 5.5%.
The giant company’s bid to buy back stocks, has however been slow, with the CEO managing to buy back stock worth around $18 million. Mr. Buffet had been looking for an opportunity to use the firm’s more than $70 billion is cash pile.
Class A shares rose by 5.4% to close at $105,725 in trading. The stock had dropped after the Japanese earthquake, to less than $100,000 and this highly affected Berkshire’s derivative bets.
At the same time shareholders at Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) annual meeting Omaha said that they were not worried about the health of the CEO, Mr. Warren Buffet. This is because the CEO had earlier in the year revealed that he suffers from prostrate cancer. He was however optimistic in the gathering in Omaha that is expected to bring in over 30,000 shareholders, and recently said that the cancer was discovered early and that he was going to start radiotherapy in July.
The annual Berkshire meeting that is normally held in early May has become a fiesta for the financial world, and it is usually highly anticipated. This year, people will be looking to listen to Mr. Buffet and the Vice President of the giant company hold a marathon Q&A session. However, Mr. Buffest urged shareholders at the meeting to try out various products created by the company. This year various subsidiaries like Dairy Queen, See’s Candy and Justin Boots will be fielding booths in hopes of attracting buyers.
This year’s meeting is eagerly awaited by people since hints about who may succeed the Oracle of Omaha abound. Ted Weschler and Todd Combs are some of the names that have been floated around as possible successors. In fact, Mr. Buffet has hinted that they may be whom he has chosen since they have the brains, judgment and character to control a few billion dollars.