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This Warren Buffett stock surges to record high on ‘monster buyback’

This Warren Buffett stock surges to record high on ‘monster buyback’
Ana Zirojevic

One of Warren Buffett’s largest stock assets has recently witnessed massive price increases, culminating with a new all-time high (ATH) and promising significant profits for the world-famous investor and CEO of Berkshire Hathaway (NYSE: BRK.A).

Specifically, the stocks of Mitsubishi Corporation (TYO: 8058) have soared to their record high after Japan’s largest trading house announced a share buyback in what one analyst has dubbed a “monster” deal in the amount of ¥500bn ($3.4 billion) on February 7.

Indeed, the company pledged it would spend the above amount to buy back up to 10% of its shares, which, alongside an earlier buyback and an annual dividend, should bring total shareholders’ returns to 94% for the fiscal year ending in March 2024. As Jefferies analyst Thanh Ha Pham wrote in a note:

“If the company does not find attractive acquisition targets, we think that management would release the excess cash back to shareholders in order to maintain and improve their capital efficiency, aiming for double-digit [return on equity].”

As a reminder, Warren Buffett added to his holdings in Japan’s five leading trading houses – Mitsubishi, Sumitomo, Mitsui & Co, Marubeni, and Itochu – back in June 2023, to an average of 8.5%, demonstrating optimism about the nation’s prospects and sparking a rally on the Nikkei stock index.

Mitsubishi price analysis

Meanwhile, Mitsubishi stock is down 1.19% on the day, up 7.19% across the previous week, as well as recording an accumulated increase of 15.5% over the past month, as it is currently trading at the price of ¥2,749, according to the latest information retrieved by Finbold on February 8.

Mitsubishi 30-day price chart. Source: TradingView

All things considered, Japan’s top trading house making its new ATH will help the so-called ‘Oracle of Omaha’ increase his wealth even more, justifying once again his reputation among stock traders as one of the shrewdest and most experienced in the field.

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