Status: 07.04.2022 18:02
Legendary US investor Warren Buffett had been quiet for a long time. Now the 91-year-old has stocked up on shares again on a large scale – and bought them from a “Corona winner”.
Warren Buffett has a legendary reputation among investors. Attending the annual general meeting of his US investment firm Berkshire Hathaway, which is headquartered in Omaha, Nebraska, is a pilgrimage and personal revival for some. Many try to understand the financial moves of the investor doyen in their own stock portfolios.
But in recent years, Buffett imitators have had very little to do. The “Oracle of Omaha” practiced buying abstinence for a full six years and did not make any major acquisitions.
HP stock in high demand after Buffett joins
But now the 91-year-old apparently senses opportunities in the stock market again. After announcing plans to acquire insurance and conglomerate Alleghany and oil company Occidental Petroleum, Buffett has now identified and signed a buying opportunity in laptop and printer maker HP. Buffett is investing $4.2 billion in HP, according to a statement to the US Securities and Exchange Commission; in this way he secures more than eleven percent of all HP shares.
The star investor is thus making an abrupt about-face. As recently as February 26, he complained in his annual letter to Berkshire Hathaway shareholders that he and his right-hand man, Charlie Munger, found little in the stock markets to excite them. The response to his new acquisitions is now all the louder on the markets. HP stock is up 13 percent in premarket US trading today. HP prices are also rising in Frankfurt.
Cheap buying opportunity?
But what does Buffett find so great about his new acquisition HP? In fact, shares in the manufacturer of laptops and printers were among the big “Corona winners”. But like other technology stocks, HP papers have recently come under pressure. For the current year, a minus of over seven percent has been recorded so far.
That opened up a buying opportunity for Buffett that he seemed reluctant to pass up. Because the company is still doing well. HP recently presented strong balance sheet figures for the first quarter of 2021/2022. The company has a higher net profit per dollar of sales than its competitors.
Meanwhile, the example of HP shows once again that the star investor also follows his own advice. Buffett likes to use metaphors, once coining this stock market quip: “Opportunities rarely come up. When it rains gold, get the bucket, not the thimble.”
Large sums have flowed
The statement is clear: if investors are offered a buying opportunity, they shouldn’t splurge, they should splurge. Just like Buffett at HP. According to the announcement to the US Securities and Exchange Commission, the investor has acquired 121 million shares in the NYSE-listed company. As a result, HP rocketed out of nowhere to twelfth position in the Berkshire portfolio. The top three positions remain Apple, Bank of America and American Express. Buffett also spent a good amount of money on his acquisitions in March: He put $11.6 billion on the table for the insurer Alleghany and $7.5 billion for Occidental Petroleum.
Pundits like those at Deutsche Bank have predicted stock markets to plummet in the coming months. That would open up new buying opportunities. If Warren Buffett sticks to his current pace of shopping, his fans could soon have something to do again.