Berkshire Hathaway chief Warren Buffet says Apple should buy back more of its stock while it’s at a lower valuation, comparing it to buying dollar bills for 80 cents.
Apple Chief Executive Tim Cook should work on building his company’s value, rather than worrying pushing the stock price up on a daily basis, Buffett said in an appearance on CNBC’s “Squawk Box” on Monday, as summarized by Apple 2.0. Buffett commented on Apple as part of a three-hour appearance on the program.
Buffet related that he had discussed what Apple could do with its cash with late Apple co-founder Steve Jobs. He says that best use of Apple’s $137 billion, and growing every day, cash hoard is to buy back the company’s stock while it is priced low.
“If you could buy dollar bills for 80 cents, it’s a very good thing to do,” Buffett said.
Beyond that, Buffet’s opinion for what Apple’s best strategy for the future is to simply run the business well. If Cook does that, Buffet believes shares of Apple will rebound.
When asked about fund manager David Einhorn’s push for Apple to offer preferred shares to stockholders, Buffet said the best thing for Apple and Cook to do is to simply ignore it. Noting that his own Berkshire has lost 50% of its stock price four times in its history.
While Buffet doesn’t own shares of Apple, he is positive on the company’s outlook, and has been for some time now. In a 2010 interview, Buffet said he believed that Jobs had done a “terrific job” running Apple.