Berkshire Hathaway Takes in Money from GE and Puts Out Some to Australia
Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRKB) is having a busy morning. The holding company will receive over $3 billion for preferred shares invested in General Electric (NYSE:GE) during the economic crisis in 2008. The company has also agreed to settle a $20.5 million insurance lawsuit from the Australian (NYSE:EWA) government that involved a 2005 crash by a Royal Australian Navy helicopter in Indonesia in which nine people were killed.
Berkshire’s deal with GE follows a profit of $1.7 billion on preferred shares bought back by Goldman Sachs (NYSE:GS). The Oracle of Omaha also recently infused $5 billion into Bank of America (NYSE:BAC) for cumulative perpetual preferred stock, which pays an annual dividend of 6%, and gives Buffett a warrant to buy 700 million shares at roughly $7.14 each.
Shares of Berkshire were little changed at $103,460. The company trades at a P/E ratio of about 14 which is above its industry peers. The company also trades at a sales multiple of 1.2 which is higher than its industry rivals. On the technical front shares trade well below their declining 50 day and 200 day moving averages. The MACD shows a bearish crossover while RSI is pointing up at 45.