May 16, 2022

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HP Rise 14.8% to Record After Buffett Reveals His $4.2 Billion Stake

HP Rise 14.8% to Record After Buffett Reveals His $4.2 Billion Stake

April 7 (Reuters) – HP Inc (HPQ.N) Stocks soared to a record high Thursday after billionaire Warren Buffett Berkshire Hathaway Inc (BRKa.N)It said it had acquired an 11.4% stake estimated at $4.2 billion in the PC and printer maker.

Berkshire revealed in a regulatory filing Wednesday night that it owns approximately 121 million shares of HP stock, including 11.1 million purchased this week.

HP shares closed $5.15, or 14.8%, at $40.06, after rising earlier to $41.46.

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Corporate stock prices often soar when Berkshire reveals its new stakes, which serves as Buffett’s seal of approval.

Berkshire doesn’t regularly invest in tech companies, despite ending 2021 with a $161.2 billion stake in Apple (AAPL.O). Buffett is more of an iPhone maker than a consumer company he can fathom.

“Berkshire Hathaway is one of the most respected investors in the world and we welcome them as an investor,” HP said in a statement.

After separating in 2015 from the previous Hewlett-Packard, HP is benefiting from increased demand as people spend more time working and learning at home.

California-based Palo Alto last month agreed to buy audio and video accessory maker Poly (Poly.N), formerly known as Plantronics, for $1.7 billion. Read more

Screen displaying the HP Inc. logo. At the New York Stock Exchange (NYSE) in New York, United States, November 18, 2019. REUTERS / Brendan McDermid

Buffett has struggled to invest Berkshire’s money, which totaled $146.7 billion at the end of the year, citing high valuations and competition from private equity and other investors.

But last month, the Omaha, Nebraska, giant said it had committed nearly $22 billion in major new investment.

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These include a 14.6% stake in Occidental Petroleum (OXY.N) The $11.6 billion purchase of insurance company Alleghany Corp (YN)Berkshire’s largest acquisition since 2016.

Berkshire also owns dozens of companies including Geico auto insurance and railroad BNSF.

It did not immediately respond to requests for comment.

Mark Cash, an analyst at Morningstar, said HP may appeal to Berkshire because HP aggressively returns equity to shareholders through share buybacks and higher dividends.

“HP operates in markets that (permanently) challenge growth at high rates, so focusing on margins and returns is the best way to reward shareholders,” Cash said. “Within technology, HP can be considered a valuable game.”

Berkshire repurchased $27 billion of its stock in 2021.

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(Jonathan Stemple reports) in New York. Editing by Nick Czyminski, Bernard Orr

Our criteria: Thomson Reuters Trust Principles.