Berkshire Hathaway investors cooed yesterday after Warren Buffett’s investment arm disclosed that its net income for Q3 more than quadrupled from last year to a whopping $18.54B.
As if that wasn’t enough, the investment firm also announced it repurchased about $928m of its own shares during the quarter — something it hasn’t done in 6 years.
BH’s shares have soared 143% since the last buyback, so if 2012 signifies what is to come, well then, that’s just Buffett being Buffett, babayy.
QUIET… the oracle sees…
A stock buyback is when a company repurchases shares of its own stock to help preserve its stock price, boosting financial ratios by decreasing a company’s overall share count.
Back in July, BH changed its buyback policy to give Buffett and Vice Chairman Charlie Munger more wiggle room — now, they’re putting it to good use.
The year of the buyback
This could mean that Buffett sees some hot investment options on the horizon and is freeing up cash to pounce on them when prices are low.
And, other companies are taking a page out of the oracle’s book: Spotify announced plans to buy back up to $1B worth of its stock to boost its falling stock price, while CEOs from IBM and GE both bought back around $3m each from their respective companies.