Well-known investors and Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) Warren Buffett’s stock purchases are always closely watched. After all, “The Oracle of Omaha”, as they called him, crushed the market. Driven by Buffett’s stock picks and timely repurchases over the years, the average annual return on Berkshire Hathaway shares has doubled. S&P 500since 1965, leading to the creation of life-changing wealth for long-term shareholders.
So, what has Warren Buffett made a big bet on recently? In the latest Berkshire quarterly report, the company revealed it has invested $ 5.1billion in its own stock. The capital outlay represents Berkshire’s largest stake acquisition ever.
Bet $ 5.1 billion
It is clear that Berkshire Chairman and CEO Warren Buffett believes his company’s stock is a good deal. The total number of shares acquired in Q4 2019 and Q1 2020 is greater than all other stock purchases of the company combined in two periods.
And now there’s no doubt that Buffett believes Berkshire stock is worth buying, as Oracle of Omaha’s record-breaking $ 5.1 billion acquisition in Q2 was significantly higher than $ 1.7 billion. The company spent on stock repurchases in the first quarter of 2020. Even more, acquisitions in the second quarter exceeded $ 4.9 billion that Berkshire spent to repurchase its own stock. me in 2019.
Investors should not underestimate the impact of these buybacks. When Buffett buys back stocks, it’s not some form of financial engineering that gives little thought to building shareholder value. The CEO has repeatedly emphasized that the company will only buy back its stock if he and his investment partner Charlie Munger believe they are selling for less than its value.
Buffett said in Berkshire’s 2019 annual letter to shareholders: “If the discount rate (as we estimate) expands, we could become more active in stock buying. “However, we are not going to raise the share price at any level.”
What else did Buffett buy?
Of course, it’s always possible that Buffett spent more money buying another stock this quarter than they spent buying their own stock. Given the magnitude of this capital, however, it is unlikely that any other single investment would exceed the amount Berkshire spent on its stock.
Investors will have to wait until Berkshire filed a 13F filing for this quarter to see if there were any other major purchases during this period. Last year, Berkshire’s 13F filing for Q2 was filed with the Securities and Exchange Commission on August 14.