Buybacks, BofA Boost Buffett to S&P Beat in 2012
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Warren Buffett agrees: 2012 was a good year.
According to data out Wednesday, Buffett's Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) outpaced the S&P 500 in gains, even with no major acquisition on the books. Bolstered by an investment in Bank of America (NYSE: BAC) and buyback, Class A Berkshire shares rose 17 percent in the year, versus 13 percent for the S&P.
Along with the over-100 percent gain by BofA, Berkshire's investments in Wells Fargo (NYSE: WFC) and American Express (NYSE: AXP) also panned out, rising more than 20 percent each for the year.
Buffett also may have beat on his favorite metric: book value per share over time. Bloomberg-compiled estimates have Class A book value at $113,579 as of the end of the year. That gives Berkshire a 7.8 percent annual growth rate for the five-years ended in 2012, versus 1.7 percent fr the S&P 500.
In August 2011, Buffett sank billions into Bank of America for preferred stock that paid a 6 percent dividend annually and 10-year warrants for the purchase of 700 million BofA shares at $7.14 per share. Should Buffett have exercised those options at the end of 2012, he would have netted $3 billion on the investment.
Shares of Berkshire are flat in early trading.
According to data out Wednesday, Buffett's Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) outpaced the S&P 500 in gains, even with no major acquisition on the books. Bolstered by an investment in Bank of America (NYSE: BAC) and buyback, Class A Berkshire shares rose 17 percent in the year, versus 13 percent for the S&P.
Along with the over-100 percent gain by BofA, Berkshire's investments in Wells Fargo (NYSE: WFC) and American Express (NYSE: AXP) also panned out, rising more than 20 percent each for the year.
Buffett also may have beat on his favorite metric: book value per share over time. Bloomberg-compiled estimates have Class A book value at $113,579 as of the end of the year. That gives Berkshire a 7.8 percent annual growth rate for the five-years ended in 2012, versus 1.7 percent fr the S&P 500.
In August 2011, Buffett sank billions into Bank of America for preferred stock that paid a 6 percent dividend annually and 10-year warrants for the purchase of 700 million BofA shares at $7.14 per share. Should Buffett have exercised those options at the end of 2012, he would have netted $3 billion on the investment.
Shares of Berkshire are flat in early trading.
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