Warren Buffett’s Berkshire Hathaway is currently the institutional investor with the largest stake in International Business Machines Corp. (NYSE:IBM).
Warren Buffett’s hedge fund recently disclosed that it bought about 6.5 million more International Business Machines Corp. (NYSE:IBM) shares as the year ended. By the end of the December, the firm held about 76.97 million shares, up 10% quarter over quarter.
In an interview with CNBC, Warren Buffett admitted that one of the things he likes about Big Blue is its stock buyback levels.
“I’m buying it because I like it. This company has been doing exactly what I like ever since we started buying it. There were a 1.16 or 1.17 billion shares outstanding when we started buying and there were a fair number of options out there maybe 40 million shares or something like that. That overhang has been reduced significantly and the number of shares is now 990 million,” Buffett said.
Furthermore, Warren Buffett said that he wrote a couple of years ago when Berkshire Hathaway started buying International Business Machines Corp. (NYSE:IBM) that the best thing the stock can do is if it stayed in its price for five years. The cheaper the stock is, the more stock the company can buyback, the legendary investor said.
Moreover, Buffett said that he is not really worried about International Business Machines Corp. (NYSE:IBM)’s decline in share price and the company’s falling revenues which gives other industry observers cold feet. Though admittedly less knowledgeable about the tech industry as some other investors, Warren Buffett said that he is confident in Big Blue.
He said, “there had been no surprises at IBM since we started buying it a few years ago.” The pleasant surprise, he said, is that the stock has gone down a bit and therefore the company has been able to reduce the number of shares in the market.
Aside from Berkshire Hathaway, David E. Shaw’s D.E. Shaw & Co., L.P. is also a hedge fund with a substantial stake in International Business Machines Corp. (NYSE:IBM). The firm ended 2014 wih about 3.37 million shares Big Blue, up 153% quarter over quarter.
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