Berkshire HathawayBRK.B345.92 $Buy
HPHPQ38,76 $
Berkshire Hathaway continues to buy heavily in 2022.
Purchase Details
1 April Berkshire Hathaway filed a form 3 to the US Securities and Exchange Commission. The shareholder sends such a document to the regulator, when his share in any company is 10% and more. According to the form 3, Berkshire Hathaway buys 110 million shares of Hewlett-Packard.
Later, 6 April, Berkshire Hathaway files form with commission 4. In this document, she disclosed, what with 4 on 6 April bought another 11 million shares of HP at a price of 35-36 $. If Berkshire Hathaway bought all HP shares in this range, then its share can be estimated at about $ 4 billion. It's about 11% market value of HP, That 6 April was $37 billion.
HP: low multipliers, high dividends
Berkshire Hathaway CEO Warren Buffett is widely known as a value investor. He doesn't like to overpay for shares, and HP meets its requirements.
For example, parameter P / FCF, or capitalization to free cash flow, HP is 7. This is the minimum value among technology stocks from S&P 500. Parameters P / S and P / E for HP is also low - 0,6 And 6,2.
The company also pays high dividends. 2,9% per annum. For comparison: average dividend yield on S&P 500 is only 1,3%.
But there is also a possible negative in the history of HP. The laptop maker has been making good money in the last year.: The pandemic and the transition to remote work have led to a high demand for equipment. And disruptions in the supply chain have led to shortages and high prices.. According to some analysts, demand and prices in the market may return to normal in 2022. For this reason, investment banks Barclays and Morgan Stanley even lowered the ratings of AMD shares., Dell и HP.
To partially diversify your business, HP decides to buy Poly for $3.3 billion. This is a headphone maker., digital cameras and other devices. Seems, Buffett was positive about such a purchase..
Berkshire Hathaway started spending money
By the end of 2021, Berkshire Hathaway had accumulated a significant share of cash and cash equivalents - approximately $140 billion. According to Buffett, there are few good and inexpensive companies on the market.
But lately, Berkshire Hathaway has been a big buyer.. For example, in March it increased its stake in Occidental Petroleum to 15%, or $7.6 billion. Berkshire Hathaway also announced the takeover of the insurance company Alleghany for $ 11.6 billion. Possible, that Buffett will announce other major purchases in 2022.
Shares of Berkshire Hathaway and HP
Following news of Berkshire Hathaway's purchase of HP paper 6 April in the postmarket increased by 10%, to 38 $. This is slightly below the maximum 40 $, on which securities were traded recently, 29 Martha.
Berkshire Hathaway stock has also risen well since the beginning of 2022 - by 15%. Index S&P 500 over the same period fell by 6%.
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