(BRK.A), (BRK.B)
Berkshire Hathaway-backed Mitsubishi Corporation, Japan’s largest trading company, has unveiled its largest-ever share buyback initiative, amounting to a staggering ¥500 million. This move, announced during its recent third quarter earnings call, underscores the company’s commitment to enhancing shareholder value and capitalizing on growth opportunities.
Mitsubishi shares hit a new all-time high on the news.
During the earnings call, Mitsubishi Corporation highlighted the availability of approximately ¥1 trillion in additional funds for both strategic investments and returns to shareholders within the current midterm plan. This substantial allocation signals the company’s proactive approach to leveraging its financial resources for sustained growth and profitability.
This announcement comes on the heels of Mitsubishi Corporation’s earlier buyback worth ¥100 billion in May 2023, which formed part of its fiscal year’s shareholder return strategy. Additionally, the company declared a 1-for-3 stock split and raised its dividend to ¥70 per share in November of the same year, further solidifying its commitment to rewarding shareholders.
Regarding future capital allocation and strategic mergers and acquisitions (M&A), a company spokesman hinted at significant endeavors, stating, “I cannot elaborate any further, but it’s going to be quite sizable.” This statement reflects Mitsubishi Corporation’s strategic vision and ambition in pursuing value-enhancing opportunities in the marketplace.
The interest in Japanese stocks among international investors received a significant boost in 2020 when Warren Buffett’s Berkshire Hathaway invested in Japan’s top five trading companies, including Mitsubishi, Mitsui, Sumitomo, Marubeni, and Itochu. This move not only underscored the attractiveness of Japanese equities but also spotlighted the potential for long-term growth and stability in the Japanese market.
© 2024 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.