Warren Buffett’s Berkshire Hathaway Berkshire Hathaway reported its third-quarter results over the weekend.
Here are five key takeaways that could be useful for Australian investors:
1. Berkshire’s finally moving into fintech and emerging markets
There were reports over the weekend that one of Berkshire’s portfolio managers, Todd Combs, had invested US$600 million in two fintech companies focused on emerging markets. These are Brazilian payment processor StoneCo Ltd which recently listed on the Nasdaq and the parent company of India’s largest mobile-payments service, Paytm.
Whilst Buffett and Berkshire have carved out a reputation as value investors, this latest move is at the sweet spot of high growth trends. Perhaps unsurprisingly, payments companies tend to have wide moats which would attract Berkshire.
2. Berkshire bought back almost US$ 1 billion of its own shares
This was the first time Berkshire had bought back its own shares since December 2012. Perhaps it’s an indicator that Buffett and his partner Charlie Munger think that the Berkshire Hathaway share price is undervalued or that there just aren’t any better alternatives out there.
3. Berkshire’s pristine balance sheet keeps getting better
Berkshire’s balance sheet certainly won’t keep investors up worried at night. The company had cash of US$36.5 billion, investments in short-term treasury bills of US$60 billion, fixed securities of US$18 billion and equity investments of over US$200 billion. That’s before including other investments such as the US$17 billion Kraft Heinz company.
4. Berkshire made US$18.5 billion in Q3 profits
A US$18.5 billion profit in just 3 months of operations is phenomenal and the result was boosted by lower insurance liabilities, lower taxes and higher investment gains.
5. Berkshire made almost US$ 1.4 billion from its deal with IAG
Through its subsidiary Nico Group, Berkshire made US$1.4 billion in premiums earned in the nine months to 30 September from its deal with Insurance Australia Group Ltd (ASX: IAG). The deal is a 10-year, 20% quota share contract that expires in 2025.
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Kevin Gandiya owns shares in Berkshire Hathaway (B shares).
You can find Kevin on Twitter @KevinGandiya.
The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.