30/05/2022 09:19
Among the new entries that have become part of Warren Buffett’s investment portfolio, through the holding Berkshire Hathaway founded and managed by the Oracle of Omaha, there is also HP. This is what a Yahoo Finance article highlights, noting that Berkshire revealed weeks ago that it had bought 121 million shares of the PC and printer manufacturer (ticker HPQ):
a stake that, at today’s prices, is worth nearly $ 4.7 billion.
Read Warren Buffett, from Citigroup to more Apple and big oil bets. All the new entries from Berkshire. And the great farewell to the historic stake bank
The article recalls Buffett’s turning point that, as a refractory investor to focus on technology stocks, in recent years it has bet more and more on the hi-tech sector.
Only in 2014, in a letter to shareholders, Buffett wrote that he preferred “companies with simple businesses”, underlining the exact words: “If there was too much technology, we wouldn’t understand it.”
The metamorphosis took place with shopping for Apple stocks, which began in 2016. Now the iPhone giant represents Berkshire’s largest stake: with a stake of 121 million HP shares, Berkshire is officially the largest shareholder in the hardware group, holding an 11.4% stake.
With a capitalization of approximately $ 41 billion, HP is certainly not up to par, but it still remains among the leaders in the PC market. And its business is growing as, in the first fiscal quarter of 2022, the group reported revenue up 8.8% year-on-year to $ 17 billionagainst adjusted earnings per share of $ 1.10, up 19.6% yoy and well above the previous top management outlook.
In March, HP also announced a plan for acquiring Poly audio and video solutions, with through an all-cash transaction worth $ 3.3 billion as part of a plan that is expected to accelerate its growth strategy.
The company pays quarterly dividends of 25 cents per share, for an annual yield of 2.6%. And it does not end there, since the group has also given to share buyback transactionsrepurchasing nearly 42.6 million common stock, worth $ 1.5 billion, in the first fiscal quarter.
In all of this, HP stock remains relatively affordable, with a P / E price-to-earnings ratio of 7a level significantly lower than the P / E of the Wall Street S&P 500 benchmark index, which is equal to 21, and also compared to the five-year average of the same P / E of the stock, equal to 10.
Several shares on which Buffett has bet, according to what emerges from the documents on investments in equity made in the USA made up to March 31, filed with the competent authorities: Berkshire has announced new holdings in Ally Financial, in the chemical group Celanese Corp, in the insurance company Markel Corp, in the drug distributor McKesson Corp and in Paramount Global, formerly ViacomCBS.
M eye above all to the new big bets, as well as to the shares that Buffett decided to download instead.
Berkshire Hathaway has finished the first quarter of the year with cash and cash equivalents of $ 106.3 billion – reports an article from Reuters -, down from $ 146.7 billion in the fourth quarter: the difference mainly reflects new investments made in the first three months of the year.