Buffett buys back $6.7 billion worth of Berkshire stock
Updated: Aug 25, 2020
Berkshire Hathaway recently released its second quarter report for 2020.
Apparently Buffett bought back $6.7 billion worth of Berkshire stock.
That's a big number.
However, Berkshire had just north of $146 billion in cash at the end of the second quarter (if you count short-term investments in US treasury bills), so $6.7 billion is not that big in comparison.
But we should still take notice because it's reportedly the largest buy back the company has done.
And Buffett has been very clear about why he would buy back stocks: he thinks Berkshire is undervalued.
During the Covid-19 crash the stock price fell about 30%.
The average purchase price of the A shares was from around $263k to $269k, and for the B shares it was from around $175 to $179.
Those are good reference points for people who are interested in buying Berkshire stock, however the price has crept up since then.
The reason this is significant is because Buffett has famously been holding a very large cash position lately, waiting for a good buying opportunity.
It is therefore noteworthy that he used some of his cash to buy back a record amount of his own shares.
Let's see if he has bought shares in any other companies during these times.
That information is not out yet, so we will have to wait for Berkshire to publish its 13F filing before we get an answer to that.