Berkshire Hathaway (BRK.B) raises the value at which it will repurchase shares to 120% of book...


Berkshire Hathaway (BRK.B) raises the value at which it will repurchase shares to 120% of book value, from 110% previously. Coincident with that news is the purchase of 9.2K shares of Class A stock at $131K each from the estate of a long-term shareholder. 120% of book is approximately the $87-$90 range for the "B" shares, which are +1.6% to $88.68.

From other sites
Comments (12)
  • chopchop0
    , contributor
    Comments (5268) | Send Message
     
    silly. Why are they paying OVER book? Buffett made a big deal about not overpaying for things, even BRK's own stock. He dislikes buybacks but only decided to them back last year when the stock dropped to the 60s.
    12 Dec 2012, 10:12 AM Reply Like
  • Carbonyl
    , contributor
    Comments (133) | Send Message
     
    The buy back was from an estate, little crony business right there. Shareholders should sue for paying too much just to help one shareholder with estate taxes before New Year.
    12 Dec 2012, 10:38 AM Reply Like
  • New Low Observer
    , contributor
    Comments (2542) | Send Message
     
    Regarding the question "Why are they paying OVER book?"

     

    On a relative basis, BRK is trading at 1996 levels.

     

    Regards.
    12 Dec 2012, 10:43 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9903) | Send Message
     
    NLO,
    Relative basis ?? Relative to what ?
    12 Dec 2012, 11:50 AM Reply Like
  • New Low Observer
    , contributor
    Comments (2542) | Send Message
     
    Hi UI,

     

    Based on our use of Edson Gould's Altimeter, BRK-A is considered overvalued at $200,000/share (not as if anyone would sell at that level). However, the stock is considered undervalued at $155,000 and below. At least that has been the case since 1997.

     

    Sadly, our analysis is based on a theorhetical model using Edson Gould's Altimeter and the corporate policies of Charlie Munger's Wesco Financial (WSC) which got bought out by Buffett within days of our recommendation of the stock (article here: http://seekingalpha.co...).

     

    Our highly questionable and non-scientific "analysis" on BRK-A can be found here: http://seekingalpha.co....

     

    Regards.
    12 Dec 2012, 01:43 PM Reply Like
  • medzjohn
    , contributor
    Comments (513) | Send Message
     
    Too many T. Rex. Not enough Triceratops.
    12 Dec 2012, 10:23 AM Reply Like
  • Intangible Valuation
    , contributor
    Comments (593) | Send Message
     
    Good, Berkshire is worth far more than 120% of its current book value.
    12 Dec 2012, 11:07 AM Reply Like
  • Owen
    , contributor
    Comments (720) | Send Message
     
    IBM is trading at around 1,000% of its book value, and Buffett is still buying.

     

    Some people confuse "book value" with "fair value". Most companies are worth far more than their book value, and Berkshire is no exception.

     

    But by all means, a shareholder lawsuit is a great idea. I heard New York lawyers are starving.
    12 Dec 2012, 12:04 PM Reply Like
  • Owen
    , contributor
    Comments (720) | Send Message
     
    I'm also not quite sure what "crony business" is involved with buying shares from the estate of a shareholder who died two months ago, likely at a discount to what they were trading at the time.

     

    Some people see conspiracy wherever they look. Makes for an interesting life, I guess.
    12 Dec 2012, 12:14 PM Reply Like
  • Carbonyl
    , contributor
    Comments (133) | Send Message
     
    They paid $131,000/share and it was from a long-term shareholder's estate. How many people owns 9,200 A shares? Warren is just a hypocrite, telling Congress to raise the taxes on the rich and at the same time helping out a "friend" to avoid massive taxes.
    12 Dec 2012, 04:23 PM Reply Like
  • Owen
    , contributor
    Comments (720) | Send Message
     
    > helping out a "friend" to avoid massive taxes.

     

    And a dead friend, at that. The guy died two months ago. It's the lawyers now handling the estate liquidation.

     

    Buying back shares at 1.2 times book helps the remaining shareholders more than anyone. I hope he continues. Unlike you, it doesn't actually pain me to see other people make a profit.
    12 Dec 2012, 06:13 PM Reply Like
  • J Mintzmyer
    , contributor
    Comments (8846) | Send Message
     
    The buyback allowed for a smooth estate sale of a long-term partner, which would be sketchy by itself, but I don't have a problem with the 120% of book value floor. I consider both INTC and MSFT to be cheap at these levels and they are 225% and 345% of book respectively.
    12 Dec 2012, 12:51 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs