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Stock gains power Buffett’s Berkshire Hathaway to higher profit

Reuters
Stock gains power Buffett’s Berkshire Hathaway to higher profit

STOCKS. Dividers are seen inside a trading post on the trading floor as preparations are made for the return to trading at the New York Stock Exchange on May 22, 2020.

Reuters file photo

For all of 2020, Berkshire says it bought back $24.7 billion of its own stock, topping its old record $5 billion in 2019

Warren Buffett’s Berkshire Hathaway Inc on Saturday, February 27, said quarterly operating income rose 14%, aided by improved results from its insurance businesses, while soaring prices of stock holdings such as Apple Inc led to a nearly $36 billion overall profit.

Fourth quarter operating income rose to $5.02 billion, or approximately $3,252 per Class A share, from $4.42 billion, a year earlier.

Net income, reflecting the stock gains, rose 23% to $35.84 billion from $29.16 billion a year earlier.

For all of 2020, operating income fell 9% to $21.92 billion, while net income fell 48% to $81.42 billion.

Berkshire, whose shares trailed the broader market over the last decade and significantly in 2019 and 2020, repurchased about $9 billion of stock in the quarter, a sign Buffett considers his Omaha, Nebraska-based conglomerate undervalued.

For all of 2020, Berkshire said it bought back $24.7 billion of its own stock, topping its old record $5 billion in 2019.

“At a discount of 40% to intrinsic value, the repurchases looked extraordinarily compelling,” said Tom Russo, a partner at Gardner, Russo & Gardner in Lancaster, Pennsylvania, a longtime Berkshire shareholder. “Repurchases capture forever the benefits of Berkshire’s businesses for the remaining shareholders.”

Berkshire stock has risen 4.8% this year, beating the Standard & Poor’s 500’s 1.5% gain. – Rappler.com

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