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

NVR

14/08/2023 22:54

(Adds details from filing, company background, paragraphs 2-4,
7-13)
    By Jonathan Stempel
       Aug 14 (Reuters) - Berkshire Hathaway  BRKa.N , the
conglomerate run by billionaire Warren Buffett, on Monday
disclosed new investments in the homebuilders DR Horton  DHI.N ,
Lennar  LEN.N  and NVR  NVR.N .
    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  GM.N , whose shares fell 1% after hours.
    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  AAPL.O .
    Among the other second-quarter changes disclosed on Monday,
Berkshire added to its stake in Capital One  COF.N , reduced its
stakes in Celanese  CE.N  and Globe Life  GL.N , and exited
holdings in Marsh & McLennan  MMC.N , McKesson  MCK.N  and
Vitesse Energy  VTS.N .
    

 (Reporting by Jonathan Stempel in New York
Additional reporting by Lewis Krauskopf; Editing by Marguerita
Choy and Matthew Lewis)
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))