👀 Ones to watch: The MOST undervalued shares to buy right nowSee Undervalued Shares

Warren Buffett's company invests in three homebuilders even as rates rise

Published 15/08/2023, 07:54 am
© Reuters. FILE PHOTO: Berkshire Hathaway logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 10, 2023.  REUTERS/Brendan McDermid/File Photo
GM
-
DHI
-
LEN
-
BRKb
-
NVR
-

By Jonathan Stempel

(Reuters) -Berkshire Hathaway, the conglomerate run by billionaire Warren Buffett, on Monday disclosed new investments in the homebuilders DR Horton (NYSE:DHI), Lennar (NYSE:LEN) and NVR.

The investments were disclosed in a regulatory filing that detailed Berkshire's U.S.-listed stock holdings, which comprise most of its $353.4 billion equity portfolio, as of June 30.

All were made during the second quarter, a down period for Berkshire's homebuilding and remodeling businesses such as Clayton Homes, Benjamin Moore paint and Johns Manville insulation as rising interest and mortgage rates slowed demand.

But Berkshire said those effects have been partially offset by new construction activity resulting from low inventory of existing homes for sale, an environment that could benefit homebuilders.

Berkshire said that as of June 30, it owned about 5.97 million DR Horton shares worth $726.4 million, about 153,000 Lennar shares worth $17.2 million, and 11,112 NVR shares worth $70.6 million.

The filing does not say which investments are Buffett's and which are from his portfolio managers Todd Combs and Ted Weschler.

Larger investments are usually Buffett's, and investors often try to piggyback on Berkshire's moves, reflecting Buffett's reputation as an investor.

Shares of DR Horton rose 2.8% and Lennar rose 2% in after-hours trading. NVR's stock price tops $6,000 and its shares therefore trade more thinly.

Berkshire also owns dozens of operating businesses including the Geico car insurer, BNSF railroad, several energy, utility and industrial companies, and consumer brands such as Dairy Queen, Duracell, Fruit of the Loom and See's Candies.

Despite the new investments, Berkshire was a net seller of stocks in the quarter, buying $4.6 billion and selling $12.6 billion from its $353.4 billion equity portfolio.

The selling included 45% of Berkshire's stake in General Motors (NYSE:GM), whose shares fell 1% after hours.

© Reuters. FILE PHOTO: Berkshire Hathaway logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 10, 2023.  REUTERS/Brendan McDermid/File Photo

For all of 2023, Berkshire has sold $18.4 billion more stocks than it has bought. Its largest stock holding by far remained its $177.6 billion stake in Apple (NASDAQ:AAPL).

Among the other second-quarter changes disclosed on Monday, Berkshire added to its stake in Capital One, reduced its stakes in Celanese and Globe Life, and exited holdings in Marsh & McLennan, McKesson (NYSE:MCK) and Vitesse Energy.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.