.......and that WEB is looking at Deere........they're a great American company with a great future, with an attractive price nowdays.......besides agricultural sales, their construction equip division looks good to me, and don't forget lawn and garden. And talk about brand loyalty....
This is not a WEB stock. Too capital intensive. They must reinvest much of their earnings developing new equipment and retooling factories. this is a cyclical stock that WEB wouldn't want to own IMHO
Buffett is set on lowering Berkshires exposure to the stock market not add on to it. You will only see him buying companies that Berkshire can own outright.
Read James Grant's article "The Buffett Dilemma" pg 92, Oct issue of Money magazine. He explains Buffett's thinking on this idea. Selling stocks creates a real tax problem for Berkshire that is one reason for buying GRN in the way he is doing it.
Buffett has said that he is on the lookout for good companies to buy (1 to 2 billion dollar range) not stocks.
I like this idea, and that's why I am buying BRKb's.
Deere had $332 million remaining in $1000 million share repurchase authorization as of 31 Jul 98. They spent about $321 million on their own stock in the quarter ended 31 Jul 98, buying shares at around $50 each. Now that they have warned the stock down to $31, perhaps they are completing the repurchase before the end of their FY in Oct. Do they typically buy blocks through Lehman?
Deere isn't the typical Buffett long term holding, IMO, due to the dependence on (weather- and commodity price-affected) farm sales for 2/3 of their equipment-related income. Certainly could be a good trade though. Lots of capital equipment makers are selling at cyclical lows, with good cash flows.
............It wouldn't surprise me if WEB is behind these huge transactions........there were persistant rumors this summer that Buffet was looking at the stock....it would fit a lot of his criteria as far as being a well established company dominant in their sector.......low P/E right now of 7.2........way down from their high...........problem is that the agricultural sector is hurting right now..........guess Buffet might figure they've been down so long it's time for a turn around, huh.