Bloomberg News reports Warren Buffett’s Berkshire Hathaway revealed the three US homebuilder positions on Monday. This change caused the shares of every company to go higher as the billionaire betted on the US housing market.
More about Shares
The shares of D.R Horton, Lennar, and NVR surged Monday after Berkshire revealed the new positions in the recent 13F filing with the SEC. By how much did the stocks rise? The stocks of D.R Horton and Lennar escalated by more than 2%, while stocks of NVR surged by more than 1% after the news.
The biggest new position in Berkshire is in D.R. Horton. The firm holds almost 6 million stocks of the homebuilder of more than $720 million as of June 30th. In NVR, the Berkshire holdings were tallying closer to $70 million, with the position in Lennar registering at around $17 million at the end of the second quarter (Q2).
There were as many as 3 positions initiated by the company in the first quarter.
Scenario in the second quarter
In the second quarter, D.R Horton stocks of D.R Horton surged 24% as compared to Lennar when it gained 19%. During the same period, the iShares US Home Construction ETF closed up 21%, thereby outpacing the 8.5% gain of the S&P 500 index. The 3 homebuilders that Berkshire bought are the biggest holdings in the fund.
The homebuilder stocks have derived benefits from the absence of inventory in the US housing market, which has pushed away several potential buyers towards newer construction.
Bloomberg News reports that Berkshire has also curbed the bulk of its exposure to Activision Blizzard and automaker General Motors while it has been adding up to the holdings in Capital One, the credit card bank. Berkshire sold off as much as 70% of its holdings in ATVI and 45% of its stake in GM.
In July, Berkshire divulged the Activision sale in a regulatory filing. It happened after the company’s deal that it was to be acquired by Microsoft, which moved closer to a resolution after a court ruling in the past month.
During 2020 and 2022, they paired back its holding in many bank stocks. For instance, it sold out Bank of New York Mellon and Minneapolis lender US Bancorp in the first quarter. During the second quarter, the company was a net seller of stocks.
At the time of the regional bank crisis that occurred at the beginning of this year, many observers were wondering whether Buffet would be stepping in to bolster the firms that were troubled following the Oracle of Omaha injected capital that was fed into Bank of America and Goldman Sachs at the time of the financial crisis.
As of June 30th, holdings of Berkshire in Bank of America, Jefferies, and Ally Financial remained unchanged.
