ValueMaven

Berkshire's current 20.2% stake (188.5 million shares) in Occidental is valued at $11.3 billion. If it exercised its warrants at $59.62 it would receive 83.9 million shares valued at $5 billion. Adding its $10 billion of OXY preferred results in a total stake of $26.3 billion.

Can anyone recall a time in Berkshires history when they have acquired so much common stock of a company so quickly????

Wild!!

Bloomstran on the Q

From the Q: # of o/s as of 7/26: A-share: 599,924 # of o/s as of 7/26: B-share: 1,301,126,370

Looks like $1B of buybacks in the Q at an avg price of ~$280. Looks like another $1.4B was bought back in July ...

Berkshire paid $870M for Mr. Abel's 1% stake in BHE. Does that mean that BHE is worth $87B?

I agree - however I wouldnt jump to any conclusions just yet regarding Mr. Abel. Thus far his actions have been A+ from a corporate governance and operating perspective.

I thought he had a modest size stake in the b-shares?? with his large stake in BHE as well...which we now know what happened too...I would have liked if he swapped his BHE position into BRK stock...what gives?

long term bulls on the name should be very happy with these very strong results. Operating Income was very strong in a very challenging market. Buyback was not as aggressive as I thought ... so what?? I dont own the stock for Berkshire to gun it higher through buybacks ... BNSF is a monster asset - and I am looking forward to having the Alleghany deal closed soon!!

I agree ... will be interesting to see operating income, BHE's tax rate, size of share repos, GEICOs combined ratio, and margins at MSR (how inflation might be playing a role here)...and if big-man added to AAPL

the warrants alone using some very basic assumptions are worth at least $8-$9B...maybe as high as $11-$12B ... they are $6ITM currently. Using today's price, strike of $59, and 7 years till expiration you get a rough value of between $14 - $16 per warrant ... Berkshire owns 85M warrants ...

OXY stock is on fire - north of $65 and the warrents are now ITM by over $6 per share w/another 7-8 years to go.

Greg is one of the best Berkshire analysts out there ... so not a relevant comment @KPO

BHE has a negative tax rate. Not many narrow moat businesses can say that! He has also said before that BHE is a bit of a crown jewel inside of Berkshire. Regardless BHE is going to be worth a lot more in 5-10 years in the future. Let's hope they make a distressed acquisition sometime during the next downturn!

A representative from Trident’s parent company, a Berkshire Hathaway affiliate, said in a statement that the resolution included no finding of wrongdoing and that Trident “strongly disagree[s] with the agencies’ interpretation of Trident’s prior lending practices.” “Trident and any affiliated companies have never denied or discouraged access to mortgage loans or other services based on race,” according to the statement.

Greg Warren of Morningstar (one of my favorite Berkshire analysts) is out with some new commentary from a few days ago. Worth hunting down!

Warrents are now ITM by about $5 per share, with another 8 years to go. Berkshire effectively controls ~26% of OXY's common stock + $10B preferred at 8%. WOW. I do not have time to play around with BSM assumptions for the warrents - but these have to be worth many billions - figure at least $5-$7B alone. These warrents were issued basically for free as part of the preferred deal.

I am not a sempra bull ... so I dont know. They basically have three different businesses a traditional regulated utility business, a vast LNG business both here and in Africa, and ONCOR. Oncor is a very unique asset. Was a mistake for BHE to lose out. That said BHE has about~$50B of CAPEX project over the next few decades ... so we will see

AXP - massive quarter. By my estimates Berkshire is now a ~20% equity holder.

The more I study Sempra Energy, the more annoyed I am that Berkshire lost out on the ONCOR asset. That would have been an awesome asset inside of BHE. Such is life

nice find @gfp - why is it down -20% YTD though?? Mostly in TIPS as well ... these CEF always scare me... some EMD exposure, but still Western is generally considered a more conservative CEF manager

New: https://assets.empirefinancialresearch.com/uploads/2022/07/Berkshire-Hathaway-analysis-Whitney-Tilson-7-7-22.pdf The most interesting slide to me is slide 10 .. this is also one of the widest gaps to IV in sometime according to Tilson

Cant wait to see the FMV valuation of the warrents using BSM assumptions...should be in the next Q ... those warrents were a real sweet kicker!!

There is a 1.7% deal spread into the Y transaction currently. Assuming a tax-free account, you are looking at ~3.4% annualized return on a deal that will likely close in the next few months (Berkshire says 4Q)...worth keeping an eye on.