Warren Buffett’s Berkshire Hathaway Inc. posted an increased fourth-quarter profit Saturday, with the billionaire investor using his annual missive to investors to explain a recent surge in stock buybacks.
For the year, Berkshire bought back nearly $25 billion in shares, according to the company’s earnings report. Before the last few years, Mr. Buffett had refused to buy back any Berkshire stock.
In Mr. Buffett’s annual letter to shareholders, he defended the larger-than-usual buybacks, saying they enhance the intrinsic value for shareholders but still leave Berkshire ample funds for any opportunities. He was less than complimentary of other chief executives buying back stock.
“American CEOs have an embarrassing record of devoting more company funds to repurchases when prices have risen than when they have tanked,” he wrote.
Berkshire’s available cash and short-term Treasury bonds were $138.3 billion in the fourth quarter. Investors have been watching for over a year to see if Mr. Buffett would buy a significant stake in a large company as he has in other turbulent times for the U.S. economy.