Warren Buffett likely bought back $2.4 billion of Berkshire Hathaway stock in October, boosting repurchases to a record $18 billion this year

• Warren Buffett’s Berkshire Hathaway has likely bought back more than $18 billion of its stock this year.
• The billionaire investor’s company repurchased about $16 billion of its shares in the first nine months of 2020, and appears to have bought back another $2.4 billion in October, based on its shrinking number of outstanding shares.
• Buffett and his team are probably eager to deploy Berkshire’s massive cash reserves, may be feeling more bullish after exercising caution for several months, and might not see many better investments than their own company’s stock.
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Warren Buffett’s Berkshire Hathaway appears to have repurchased more than $18 billion of its stock this year, suggesting the famed investor is itching to deploy his company’s vast cash hoard and continues to see its shares as a bargain.

After buying back about $7 billion of Berkshire stock in the first six months of 2020, Buffett and his team repurchased a record $9 billion worth in the three months to September 30, the conglomerate’s third-quarter earnings show.

They likely snapped up another $2.4 billion of Berkshire stock in October, based on the decline in the group’s outstanding shares between September 30 and October 26, and their average trading price in that period.

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Berkshire’s roughly $18.4 billion of buybacks this year is “an impressive amount, especially compared to $5 billion in 2019,” James Shanahan, an Edward Jones analyst who covers Berkshire, told Business Insider.

“The buyback remains attractive, in my view, given that the valuation is still below 1.2 times book value,” he added, speaking before Monday’s rally that added as much as $35 billion to Berkshire’s market capitalization.

Buffett, a longtime fan of buybacks, has likely ramped them up because he wants to use some of Berkshire’s roughly $139 billion in cash, and hasn’t spotted many investment opportunities as enticing as its shares.

Together with Berkshire’s $4.8 billion in net stock purchases last quarter and a flurry of deals in recent months, it appears that Buffett is splashing the cash after taking cover from the pandemic for several months.

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Berkshire’s shares are down about 2% this year, trailing the benchmark S&P 500 index’s 11% gain. The conglomerate’s roughly $535 billion market capitalization outweighs its $419 billion in net assets at the end of September by about 28% — not far off the 1.2 multiple at which Buffett has promised in the past to be “aggressive” in buying back stock.