Legendary investor Warren Buffett is spending big again. Meanwhile, amid the volatility of the stock market – given dragging pandemic issues and Russia’s invasion of Ukraine— many investors are shedding their shares and looking elsewhere, like gold and even cryptocurrencies.
HP Purchase
As reported by CNN Business, the billionaire’s firm Berkshire Hathaway Inc. Class A (NYSE:BRK.A) has announced the acquisition of $4.1 million in HP Inc (NYSE:HPQ) stock —121 million shares— which means Buffett now holds an 11% stake in the tech company.
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“Shares of HP were up more than 17% in morning trading Thursday on the news, after hitting a new 52-week high,” according to CNBC.
The deal follows several other moves in March, as Berkshire raised its stake in Occidental Petroleum Corporation (NYSE:OXY) and acquired the New York-based insurer Alleghany Corporation (NYSE:Y) for $11.6 billion.
Despite HP’s struggle in the last decade —trailing bigger tech companies— Buffett’s acquisition should certainly be well founded.
Evercore ISI tech analyst Amit Daryanani wrote in a note, “We view Berkshire buying HPQ shares as a positive that validates HPQ’s strategy/deep value.”
Back Into Action?
These are Warren Buffett’s first major acquisitions in the last six years, which means his firm sports $146.7 billion in cash and equivalents.
The “Oracle of Omaha” also remained quiet during the darkest days of the pandemic, but has sprung into big action lately as the war rages in Ukraine and the Federal Reserve is gradually pulling back its support to the U.S. economy.
“One big reason is Buffett's ongoing commitment to the energy sector, even as other high-profile investors try to give their portfolios a green makeover,” CNN’s Julia Horowitz asserts.
As energy prices have skyrocketed —oil, gas, and coal— the stock of some of the biggest names in the sector has followed suit. Shares of Oxy shot up by 96% in the first quarter and those of Chevron Corporation (NYSE:CVX) by nearly 40%.
“Berkshire also has a huge energy subsidiary that owns leading electric utilities such as PacifiCorp (OTCMKTS:PPWLO) and MidAmerican, oil and natural gas pipelines, and several renewable power companies.”
