Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 16
Last 15 months ratio of average repurchase price to book value. Price expressed in B and takes into account both A & B repurchases. Quarter end book value used for all 3 months in the quarter.
1.57 and 1.56 from the last 2 months are the highest ever. Feels like a step change in what he is willing to pay. However, upon closer inspection, he has paid close to these levels in the past. Note 1.51 & 1.49 for Sep & Aug last year.
Average
Repurchase Book ARP/BV
Price (ARP) Value (BV) Ratio
March 415.47 265.08 1.57
February 414.12 265.08 1.56
January 370.08 265.08 1.40
December 360.71 259.58 1.39
November 355.27 259.58 1.37
October 48.50 259.58 1.34
September 366.42 242.28 1.51
August 361.16 242.28 1.49
July 347.62 242.28 1.43
June 335.55 248.64 1.35
May 329.00 248.64 1.32
April 308.57 248.64 1.24
March 308.51 231.95 1.33
February 306.07 231.95 1.32
January 312.92 231.95 1.35
1Q-24 BV calc:
571,490 million shareholders' equity
------------------------------------ = 265.08
1,437,251 Class A outstanding * 1500
No. of Recommendations: 3
thanks for posting this...
seems Warren might be resigned to buybacks at these levels given the dearth of opportunities to deploy capital and the cash pile.
No. of Recommendations: 6
Another factor in this could be if Warren’s estimate of intrinsic value has grown faster than book value in recent quarters, so that price paid to estimated IV has increased less than price paid to BV.
Two factors that would support this :
1. Continuing buybacks over book value (small impact but directionally has this effect)
2. Warren might view the earnings in the large operating businesses plus GEICO as having been below trend recently and the current issues to be transitory. E.g. rightsizing the cost base in the railroad, legal charges taken in the energy division, IT legacy systems at GEICO.
No. of Recommendations: 14
This is a great table, and I've done it myself.
But I recommend doing it separately for A and B shares, since the 1500:1 economic interest ratio is not very representative of Berkshire's buyback preferences, which seem closer to something like 1540:1 these days.
i.e., a buyback at (say) $623000 per A seems to correspond to a willing buyback at around 623000/1540= $405 per B, not 623000/1500= $415 per B, based on the recent months that both A and B shares have been purchased.
Jim
No. of Recommendations: 3
Is it worth the 2.67% premium to retire the more powerful A shares? Seems like he’s placing a notably higher value on the attractiveness of an A share vs. B nowadays compared to what he suggested years ago? Further minimize the possibility of future activists getting involved with BRK?
No. of Recommendations: 3
Perhaps the As are being bought at market price when a large block is offered for sale.
Aussi
No. of Recommendations: 11
Perhaps the As are being bought at market price when a large block is offered for sale.
Certainly possible, but that is presumably a pretty rare thing.
Since spring 2022, for months that both A and B shares have been purchased, the average ratio of average price paid has been 1531.4
(The 1540 I suggested emphasized recent high points, and included the notion that there seems to have been an upwards trend. In November the ratio was 1544:1)
1530 is of course the 2% premium that Mr Buffett suggested long ago.
The simplest indication of the recent stronger preference for A shares is that that's what they've been buying.
In the 23 months from May 2020 to March 2022, both A and B shares were bought every month.
But then in the 22 months to March 2024, A shares were bought every month but B shares in only 9 of the months.
I'm sure they'd pay more now, but FWIW the highest definitely known "average paid in a month" for B shares to date remains the $357.22 from last September.
Jim
