After the market closed today, Berkshire Hathaway announced a major liberalization in its policy for buying back its shares. After release of its second quarter results on August 3, Berkshire may buy back its shares at any time when both Warren Buffett and Charlie Munger agree that the price per share of Berkshire is below its intrinsic value.
Previously, Berkshire bought back its shares only if they were below 1.2 times book value. At today’s closing price of $288,500 per class A share, Berkshire is valued at 1.37 times its March 31, 2018 book value of $211,184. At the end of the first quarter, Berkshire’s cash equaled $109 billion. Berkshire has set a minimum standard of $20 billion cash on its balance sheet.
David I Kass
Clinical Associate Professor, Department of Finance
Ph.D., Harvard University
Robert H. Smith School of Business
4412 Van Munching Hall
University of Maryland
College Park, MD 20742-1815
Phone: 301-405-9683
Email: [email protected] (link sends e-mail)
Dr. David Kass has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management and Business Finance, and is the Faculty Champion for the Accelerated Finance Fellows. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis). Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), Fox TV, American Public Media's Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by Bloomberg News and The Wall Street Journal, where he has primarily discussed Warren Buffett and Berkshire Hathaway. He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett, and Finance Fellows to Berkshire Hathaway’s annual meetings. He is an officer of the Harvard Business School Club of Washington, DC, and is a member of the investment and budget committees of a local nonprofit organization. Dr. Kass received a Smith School “Top 15% Teaching Award” for the 2009-2010 academic year.
Summary
The largest Slovenian bank, with dividend yield of 12.5% and RoE of 14% is trading just at 0.7 Price to Book ratio.
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