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Berkshire Hathaway (BRK.B) Continues to Offload HP (HPQ) Shares
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Warren Buffett’s Berkshire Hathaway Inc. (BRK.B - Free Report) has offloaded another significant chunk of its position in HP Inc. (HPQ - Free Report) , per filings last week, bringing down its total stake in the company to 11.2%. Last week alone, on three separate days, Berkshire Hathaway sold a total of $130 million worth of shares of HP.
In April 2022, Warren Buffett’s flagship company disclosed a $4.2 billion stake in HP despite ruling out the possibility a quarter of a century ago. In a 1998 meeting between Berkshire shareholders, Buffett was asked whether he would consider investing in tech companies like IBM, Intel, HP and Microsoft. He had rued the fact that he did not understand technology like he did other sectors, and hence could not predict winners for the future. "Well, the answer is no, and it's probably pretty unfortunate," he had said.
However, over the past decade, the legendary nonagenarian investor has warmed up to tech. By 2011, he had managed an estimated $12 billion stake in International Business Machines Corporation (IBM - Free Report) and then piled up about $36 billion in Apple Inc. (AAPL - Free Report) between 2016 and 2018. Berkshire's Apple holdings have skyrocketed in value to more than $150 billion, even as the IBM bet did not pay off.
So in 2022, when the news concerning Berkshire’s stake in HP came in, HP stock had gone up to a record intra-day high. However, it has tumbled more than 35% since, closing at $26.30 on Monday. In the last few weeks, Berkshire has sold more than million shares, approximately up to $300 million of its stake in the computing company.
HPs expected earnings growth rate for the current year is -19.1%. The Zacks Consensus Estimate for its current-year earnings has fallen 1.5% over the past 60 days. It currently carries a Zacks Rank #3 (Hold). On the other hand, Berkshire’s expected earnings growth rate for the current year is 13.2%. The Zacks Consensus Estimate for its current-year earnings has fallen 3% over the past 60 days. Berkshire also currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It is still not clear why Buffett’s company is reducing its stake in the tech giant. In fact, BRK.B has sold $33 billion of shares from its various positions over the last three quarters and has continued to bolster its cash reserves. Whether the prophetic investor is preparing for the rainy day, one will have to wait and watch.
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Berkshire Hathaway (BRK.B) Continues to Offload HP (HPQ) Shares
Warren Buffett’s Berkshire Hathaway Inc. (BRK.B - Free Report) has offloaded another significant chunk of its position in HP Inc. (HPQ - Free Report) , per filings last week, bringing down its total stake in the company to 11.2%. Last week alone, on three separate days, Berkshire Hathaway sold a total of $130 million worth of shares of HP.
In April 2022, Warren Buffett’s flagship company disclosed a $4.2 billion stake in HP despite ruling out the possibility a quarter of a century ago. In a 1998 meeting between Berkshire shareholders, Buffett was asked whether he would consider investing in tech companies like IBM, Intel, HP and Microsoft. He had rued the fact that he did not understand technology like he did other sectors, and hence could not predict winners for the future. "Well, the answer is no, and it's probably pretty unfortunate," he had said.
However, over the past decade, the legendary nonagenarian investor has warmed up to tech. By 2011, he had managed an estimated $12 billion stake in International Business Machines Corporation (IBM - Free Report) and then piled up about $36 billion in Apple Inc. (AAPL - Free Report) between 2016 and 2018. Berkshire's Apple holdings have skyrocketed in value to more than $150 billion, even as the IBM bet did not pay off.
So in 2022, when the news concerning Berkshire’s stake in HP came in, HP stock had gone up to a record intra-day high. However, it has tumbled more than 35% since, closing at $26.30 on Monday. In the last few weeks, Berkshire has sold more than million shares, approximately up to $300 million of its stake in the computing company.
HPs expected earnings growth rate for the current year is -19.1%. The Zacks Consensus Estimate for its current-year earnings has fallen 1.5% over the past 60 days. It currently carries a Zacks Rank #3 (Hold). On the other hand, Berkshire’s expected earnings growth rate for the current year is 13.2%. The Zacks Consensus Estimate for its current-year earnings has fallen 3% over the past 60 days. Berkshire also currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It is still not clear why Buffett’s company is reducing its stake in the tech giant. In fact, BRK.B has sold $33 billion of shares from its various positions over the last three quarters and has continued to bolster its cash reserves. Whether the prophetic investor is preparing for the rainy day, one will have to wait and watch.