Q1 Results

[aws]

https://www.businesswire.com/news/home/20190504005005/en/Berkshire-Hathaway-News-Release

http://www.berkshirehathaway.com/qtrly/1stqtr19.pdf

 

First thing I checked - 1.7 billion in stock buybacks

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Poor Berky WEB site..  Care to attach the Q as a file attachment here?

 

(never mind - it finally loaded for me)

1stqtr19.pdf

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So basically, he started repurchasing shares the Tuesday after the Annual Report was released and repurchased through he end of the quarter.  I'll do some figuring to see what the repurchase activity was between quarter end and 4/25.

 

Also appears he did not continue adding to JPM in the quarter (at least not more than a few hundred million dollars worth - if anything)

[aws]

It was basically nothing after 3/31 - maybe 10 A shares net reduction

[frog03]

BVPS per B share.  150...

[gfp]

It was basically nothing after 3/31 - maybe 10 A shares net reduction

 

I see B shares actually a bit higher at 4/25 and A shares reduced by 641 shares (some of which may have been A -> B conversions).  Could be 100-200 million dollars worth of repurchases, but its hard to know for sure.  There are still some share issuances out there from things like the BNSF merger.

 

Actually I see my error - it is a net reduction of 157 A share equivalents

 

[aws]

I just compared the total reduction between the 10-K share figure and the 10-Q and backed out the repurchases in the 10-Q and got a net B share equivalent reduction of 140k shares.  Not sure about how much they did in issuance.

 

The timing is interesting to me.  It seems like they might follow standard blackout period rules, which I believe is no repurchases starting one month before earnings are released.

[gfp]

Fascinating that Warren basically said the repurchases are so low because the stock is not that undervalued.  It's undervalued, but not back up the truck undervalued.

 

Charlie: "I predict we will get more liberal with share repurchases over time"

[Dynamic]

Interesting.

 

The KHC Q1 results weren't published but even without then the earnings handily beat 2018Q1. If the 27% share in KHC contributes around $200-230 million it's easily better.

 

I noticed they stopped publishing Book Value in the press releases this year now that it doesn't affect the buyback threshold. Using the 31 March shares outstanding, I made BV per A Share $225,553 and BV per B Share $150.37 before KHC earnings.

 

If the 27% stake in KHC adds about 215+/-15 million USD to BRK's earnings, it might add about $0.08 to $0.10 of Book Value per BRK.B share.

$225,685 per A share or $150.46 per B Share assuming about 215 million from KHC

 

[edited to correct mistake in shares outstanding at 31st March. Adds about $0.35 per B share to Book Value.]

[Spekulatius]

Operating earnings are pretty good, but their equity investments are clearly underperforming. They made ~$19.5B this quartet, but lost $27.6B last quarter. This is worse than the general market.

[Dynamic]

Fair enough, but one would expect a fair amount of deviation from the market average in a concentrated portfolio, trailing in some quarters and beating in others.

 

Berkshire Hathaway has a strong allocation to financials and a very large stake in Apple, for example, so I would expect significant deviation from quarter to quarter.

 

I wouldn't judge then too harshly on a couple of quarters any more than I'd kick myself for my underperformance in Q1 which I've since almost entirely made up for.

 

I felt that Apple in particular was priced quite optimistically at 30 September 2018 but it didn't make much sense for Berkshire to sell when it's intending to hold for many years.

[Spekulatius]

Fair enough, but one would expect a fair amount of deviation from the market average in a concentrated portfolio, trailing in some quarters and beating in others.

 

Berkshire Hathaway has a strong allocation to financials and a very large stake in Apple, for example, so I would expect significant deviation from quarter to quarter.

 

I wouldn't judge then too harshly on a couple of quarters any more than I'd kick myself for my underperformance in Q1 which I've since almost entirely made up for.

 

I felt that Apple in particular was priced quite optimistically at 30 September 2018 but it didn't make much sense for Berkshire to sell when it's intending to hold for many years.

 

The info was provided for perspective, not criticism. I think in particular WFC and KHC have hurt the equity portfolio.

[Dynamic]

Sorry, I didn't mean to imply criticism. WFC certainly hurt the equity portfolio.

 

KHC hurt the earnings and book value but isn't accounted for as part of the equity portfolio's unrealised performance as it's accounted under the confusingly named Equity Method.

[Dynamic]

Incidentally, I was looking at the Look-Through portfolio yesterday. Assuming the portfolio remains as it was last known (including the small reduction in WFC announced in the Q1 results note 4 to stay below 10%), since 31st March 2019, I think it has risen by +7.3% as of 6th May closing prices, versus +6.1% for BRK.B share price and +3.5% for S&P500 (or +3.6% for SP500TR). If you include KHC, the portfolio is up +6.9% from March 31st - May 6th.