Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B) just authorized the repurchase of $1.2 billion worth of Class A shares from "the estate of a longtime stockholder." The move surprised investors - and says a lot about what Buffett thinks of BRK's value.
berkshire hathaway stock price
- Berkshire Hathaway Share Buyback: Investor Takeaway
- Berkshire Hathaway Holdings Show Buffett Hunting a Big Elephant
- Hot Stocks: Are the Best Years Behind Warren Buffett and Berkshire Hathaway?
Warren Buffett's Berkshire Hathaway holdings have undergone some major changes in the third quarter, according to the company's latest 13F filing.
Start the conversation
Not only did Buffett and Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) sell more than $750 million in two American giants, they initiated four new holdings and eliminated three positions entirely. Overall, Berkshire's reported portfolio, which only includes long positions, increased to $75.3 billion for the quarter ended Sept. 30, up from $74.3 billion the previous quarter.
While some think Buffett is taking profits where he can, others think he is building up a stockpile of cash for a major move.
"Buffett may be selling the consumer stocks to provide more funds to his deputies while reserving money for a large acquisition," David Kass, a professor at the University of Maryland's Robert H. Smith School of Business, told Bloomberg News.
"He may be really wanting to keep that aside for his big elephant," said Kass, who is referring to Buffett's quote in a letter to shareholders last year where the 82-year-old investing legend stated, "Our elephant gun has been reloaded, and my trigger finger is itchy."
Only Buffett and Berkshire's new portfolio managers, Todd Combs and Ted Weschler, truly know why they made their latest moves, and so without further speculation, here they are.
The mood this weekend at Berkshire Hathaway Inc.'s (NYSE: BRK.A, BRK.B) annual shareholder meeting could be less festive than usual, darkened by a laundry list of concerns that includes mediocre returns and who eventually will succeed iconic Chief Executive Officer Warren Buffett.
Start the conversation
Analysts also expect shareholders to question an ethical lapse this year that resulted in the resignation of top executive David Sokol on March 29.
In January Sokol made a $10 million investment in Lubrizol Corporation (NYSE: LZ) -- shortly before recommending to Buffett that Berkshire acquire the company. When Berkshire announced on March 14 that it would indeed acquire Lubrizol for $9 billion, Sokol pocketed a $3 million profit.