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I agree with your analysis of WU. It might very well make a good fit for Berkshire. (I touch on why I don't think that will happen below.) In the mean time the company continues to do all the right things from a capital management prospective.

Dividends and buybacks. The company bought back $370 million of the $760 million in buybacks the board authorized and announced in October. That buyback was announced through end 2013. So they bought back about 1/2 half of the authorized amount in 1/5 of the allocated time. I would not be surprised if they buy back another $370 million in the 1st quarter and then authorize more. As you noted, they have ample FCF and borrowing capacity to buy back a substantial portion of their stock. In addition if you look back at previous pricing initiatives management has a good track record of fulfilling on the promise of higher revenues and profits a couple of years out.

For Berkshire, I think that the Buffett is more interested in capital intensive businesses now. These can grow and soak up cash so that the future capital allocators job is less important / overwhelming. Imagine if all of Berkshire operating cash flow needed to be reinvested in new business 10 years from now. It would be overwhelming. (A dividend is another way to partially solve this problem.)

Buffett is painting a picture and he wants to leave something that does not need to have increasing larger "scenes" added to it every year.

As an owner I am totally happy with this by the way. The market would not trust a future capital allocator in the same way as Buffett (or would I).

Disclosure I am long WU since the dip in the fall. If Buffett does not buy it someone else might.
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