Instead of tapping its own cash hoard for new buybacks and dividend hikes, Apple is borrowing money to avoid paying billions in repatriation taxes.
Read more here: Apple’s tax dodge
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Shares representing 1% of conglomerate’s class A stock bought from estate of unnamed investor
Billionaire Warren Buffett’s conglomerate Berkshire Hathaway spent $1.2bn buying its own shares from the estate of an unnamed investor. The anonymous purchase was made at $131,000, or 117% of book value. Berkshire said it bought 9,200 Class A shares from “the estate of a long-time shareholder”. The shares represent 1% of Berkshire’s Class A stock.
Buffett – known as the Sage of Omaha – has always been reluctant to conduct share buybacks and agreed to it last year only after Berkshire hit historically low valuations. In its most recent filing, Berkshire said it had not made any repurchases in the first nine months of 2012, and spent just $67.5m on buybacks in 2011.
Berkshire’s Class A shares rose after its announcement, up 2.8% at $134,500.
The repurchase came less than a month before the looming “fiscal cliff”, automatic tax rises and spending cuts set for 1 January that the White House and members of Congress are negotiating to avoid.
Among other levies, the estate tax is expected to rise in the new year package by as much as 20 percentage points.
Buffett was a signatory to an open letter released on Tuesday that called for a lower starting point for the tax and a higher tax rate, beginning at 45%.
“We believe it is right to have a significant tax on large estates when they are passed on to the next generation. We believe it is right morally and economically, and that an estate tax promotes democracy by slowing the concentration of wealth and power,” the 33 signatories wrote in the letter released by the campaign, United for a Fair Economy.
Buffett has been publicly campaigning for more than a year for higher taxes on the wealthy, even lending his name to a proposal called the “Buffett Rule” that failed in Congress.
Stock buybacks are nice but they don’t change the fundamentals of a company.
Read the original here: Stupid stock move of the day! IGT up?
Ingersoll Rand (IR -0.3%) CEO Mike Lamach says that he held a “constructive” meeting with Nelson Peltz’s Trian Fund, which this month disclosed a 7% stake and said it would push for changes at Ingersoll. Lamach also says that the firm is receiving “solid” orders and that it could spend 800M on buybacks in H2. Post your comment!
More here: Ingersoll Rand ([[IR]] -0.3%) CEO Mike Lamach says that he held a "constructive" meeting with Nelson Peltz’s Trian Fund, which this month disclosed a 7% stake and said it would push for changes at Ingersoll. Lamach also says that the firm…
NEW YORK (TheStreet) — Zions Bancorporation was the winner among the largest U.S. financial names on Monday, with shares sliding 4% to close at $20.06.
The broad indexes were mixed, as investors digested some mediocre, but stale, housing data, a strong earnings report from AT&T , and IBM’s announcement that it would increase its quarterly dividend by a dime to 85 cents and authorized $7 billion in share buybacks. Big Blue’s shares rose 1% to close at $200.00.
AT&T reported first-quarter earnings of $3.6 billion, or 60 cents a share, beating the consensus estimate of a 57-cent profit, among analysts polled by Thomson Reuters. The company’s first-quarter revenue of $31.82 billion increased 2% year-over-year, but was just shy of the consensus estimate of $31.85 million. AT&T’s shares rose 4% to close at $31.72.
Click to view a price quote on ZION.Click to research the Banking industry.
Originally posted here: Zions: Financial Loser
Buttonwood takes a dour view on corporate buybacks, noting companies like Apple tend to buy shares at highs and leverage themselves up in the process. On the cynical side, companies may be using buybacks to boost earnings per share, which in many cases is a key determinant of executive compensation. 4 comments!
Originally posted here: Buttonwood takes a dour view on corporate buybacks, noting companies like Apple tend to buy shares at highs and leverage themselves up in the process. On the cynical side, companies may be using buybacks to boost earnings per share, which in many…
Category : World News
NYSE trading volume that’s hit a 10-year low could show that big money from pension funds and insurers still isn’t sold on stocks. So what’s fueling the rally? Company stock buybacks, Thomas Lee says – “for every $1 of equity inflows since 1990, there’s been $3 of stock buybacks” – which he sees as a bullish trend. As returns on equities improve, Lee says, investors will start coming back. 7 comments!
Read the original here: NYSE trading volume that’s hit a 10-year low could show that big money from pension funds and insurers still isn’t sold on stocks. So what’s fueling the rally? Company stock buybacks, Thomas Lee says – “for every $1 of equity…
Updated to reflect additional information on buybacks and analyst ratings.
NEW YORK (TheStreet) — In February, Warren Buffett made waves when he explained why an IBM share lull would benefit his $10.3 billion stock holding. After Wells Fargo and Bank of America passed Tuesday’s Federal Reserve stress tests, Buffett’s point may also apply to his biggest bank investments.
In his annual letter, the investment guru detailed his math on how to gain on stock swoons and share repurchases, using his investment in IBM as an example. After Wells Fargo boosted its dividend 83% and indicated accelerated buybacks on the heels of stress test results, Buffett’s largest bank holding may have a similar thesis, with a relevance to other Berkshire Hathaway investments in Bank of America, American Express and U.S. Bancorp.
Click to view a price quote on WFC.Click to research the Banking industry.
See more here: What Buffett Knows About Bank Investing That You Don’t
NEW YORK (TheStreet) — Investors are looking for most of the large stress-tested banks to increase their dividend payouts and authorize share buybacks after the Federal Reserve announces the results of its stress tests Tuesday afternoon, but there are three large holding companies hoping for permission to repay federal bailout funds.
The Fed is set to publicly disclose an unusually detailed set of stress test results today at 4:30, with most of the largest U.S. bank holding companies having submitted plans that include an increased return of capital to investors, through higher dividends and share buybacks.
In order to gain the Fed’s permission for an increased return of capital to investors, the banks need to prove that they could maintain Tier 1 common equity ratios of at least 5%, while increasing their return of capital and suffering through a dire economic scenario that includes real GDP contracting “sharply through late 2012, with the unemployment rate reaching a peak of just over 13 percent in mid-2013,” while also assuming “that U.S. equity prices fall by 50 percent from their Q3 2011 values through late 2012 and that U.S. house prices fall by more than 20 percent through the end of 2013.”
Click to view a price quote on BAC.Click to research the Banking industry.
Read more: 3 Banks Ready to Repay Uncle Sam
James Altucher goes all-in with his forecast for Dow 20K – seemingly holding nothing more than a low pocket pair. He tells Henry Blodget that people shouldn’t be so angry (video) with his long-standing bullish call with all the metrics positive and planned buybacks by U.S. firms sitting as a huge driver for prices. The tale of the tape: At today’s Dow, his uber-bullish call is for a 54% runup in about a year. 2 comments!
View original post here: James Altucher goes all-in with his forecast for Dow 20K – seemingly holding nothing more than a low pocket pair. He tells Henry Blodget that people shouldn’t be so angry (video) with his long-standing bullish call with all the metrics positive and…