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Berkshire Hathaway Inc. Message Board

  • hjclasvegas6969 hjclasvegas6969 Apr 28, 2013 9:52 AM Flag

    i wonder, what does buffett think of aapl borrowing to

    buyback stock at 3 xs bookish ? What is aapl, IV ? If he could do it over , would he buy back brkb in size under 75 ?

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    • « What is aapl, IV ?»

      My guess is AAPL is currently trading at IV.

      The Dividend per share per quarter was recently raised to $3.05 ($12.20 per share per year). If one is willing to "pencil in" dividend per share growth of 10% per year for the next five years, followed by 7% per year for a second five years, and then assume sustainable growth of 3.5% per year for ninety years, and discount that one hundred year stream of dividends by 8% per year, then AAPL's intrinsic value per share (net present value of the dividends that a shareholder is expecting to receive from the company) would be about 34.16 times the current dividend per share, or $417.

    • HC-AIG has an opportunity to buy back stock at a 40% discount to book value. They've already bought back all the government's shares and I'm expecting a major announcement soon authorizing a new share repurchase program.

      It's current price 40.5 but it should be trading a 50.

      With respect to BRK-buying back shares above book depreciates equity/book value which is essential for writing insurance, so buy backs should be done on a limited basis unless we plan to suspend writing insurance because rates are too low. But I've thought for years that BRK should be buying back shares that Buffett gifts to charities. Asuming the charities need cash and the price is right we could be buying back 1-2% of our outstanding shares every year.

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