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Are you running out of breath now?!

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Warren Buffett CEO Berkshire Hathaway Oracle of Omaha

In Warren Buffett and Berkshire Hathaway (NASDAQ:FB) Stock buybacks are a hot topic. A look back over the past few years shows that the star investor has used a lot of funds for this capital measure. As such, a high relative proportion of outstanding shares have been purchased and retired, increasing the value of the remaining securities accordingly.

Whether Warren Buffett is buying back more Berkshire Hathaway stock in a big way is an interesting question. At least the stock has gotten more expensive. In the last year alone, share certificates are up very significantly and above the level of the broader market. But we also recognize that the Oracle of Omaha has recently discovered other areas of investment, for example in an oil market.

Early headlines suggest that the pace of share buybacks is at least slowing. Let’s take a closer look at that below.

Fewer share buybacks at Berkshire Hathaway?

As the portal of the American stock exchange Barron’s now reports, Warren Buffett has so far spent 2 billion US dollars on the repurchase of shares in Berkshire Hathaway in 2022. This, in turn, emerges from filings with the SEC, that are available to the public. So the date refers to March 2 of this year.

$2 billion for share buybacks not long ago. More recently, Oracle of Omaha invested a mid to high single-digit billion per quarter on average. Although this pace slowed down a bit in the fourth quarter. After all, we still have all of March, when there could theoretically be more share buybacks.

However, there is hope for investors who are confident in this return on capital. At Berkshire Hathaway, Warren Buffett has apparently ramped up share buybacks a bit since mid-February. But whether it stays that way is, of course, another question.

Theoretically still at the intended target amount

Warren Buffett recently stated that Berkshire Hathaway share buybacks would take place up to a price-to-book ratio of 1.5. This is a valuation measure that is attractive. At the current 1.46, the stock still meets the criteria. However, we can say: it is still the case.

Prices in the broader market getting cheaper can also reveal other investments. Perhaps Warren Buffett is investing somewhere else in general, or at least looking around. However, after years of big buybacks, the Oracle of Omaha may now be slowing down a bit. However, with more than US$140 billion expected in cash, there would still be potential. Either for investments or for repurchases. Let’s see what the coming weeks, months and quarters in general will bring for investments.

The article Warren Buffett, Berkshire Hathaway, and Stock Buybacks: Running Out of Breath Now? first appeared in The Motley Fool Germany.

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Vincent owns shares of Berkshire Hathaway. The Motley Fool owns and recommends Berkshire Hathaway (B-share) shares and recommends the following options: short January 2023 $200 put on Berkshire Hathaway (B-share), short January 2023 $265 buy on Berkshire Hathaway (B-share ) and long January 2023 $200 call on Berkshire Hathaway (B shares).

Motley Fool Germany 2022

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