Warren Buffett.
REUTERS/Rick Wilking
- Warren Buffett deployed and committed about $22 billion in the first quarter.
- Berkshire Hathaway spent $10 billion on Oxy and HP stock, and made a $12 billion deal for Alleghany.
- Buffett’s company has only spent over $8 billion on stocks in one other quarter during the pandemic.
Warren Buffett was castigated for not snapping up discounted stocks and striking lucrative deals when the pandemic tanked the stock market in March 2020. His recent shopping spree should give him plenty to boast about during Berkshire Hathaway’s annual shareholder meeting later this month.
Buffett’s company spent and committed a total of $22 billion in the first quarter of this year, marking one of its most aggressive buying periods of the pandemic so far. It plowed about $7 billion into Occidental Petroleum stock over the 13 trading days between February 28 and March 16. It disclosed a deal to acquire insurer Alleghany for $11.6 billion in cash on March 21. It also revealed an 11.4% stake in HP on April 6, after spending more than $3 billion building that position last quarter.
Between Occidental and HP, Buffett’s company piled upwards of $10 billion into stocks last quarter. For comparison, it spent a total of $8.4 billion on stocks over the course of 2021, and less than $8 billion in three of the four quarters of 2020.
Investors will have to wait until Berkshire’s first-quarter earnings and 13-F portfolio update in May to learn how much it spent on stocks, and which names it added to its portfolio in the first quarter. Still, it’s safe to say the conglomerate significantly ramped up its stock purchases in the period.
It’s a similar story with Berkshire’s Alleghany deal, which dwarfs its other big transaction of the pandemic: a $10 billion deal to buy Dominion Energy’s natural-gas assets. That deal ultimately shrunk in size, as Berkshire scrapped its $1.7 billion takeover of Dominion’s Questar Pipeline Group in the face of regulatory scrutiny.
Berkshire’s deployment and commitment of $22 billion last quarter rivals its recent annual spending on stock buybacks. Berkshire spent a record $25 billion on share repurchases in 2020, then set a new record in 2021, when it laid out north of $27 billion.
It’s worth noting that $22 billion won’t make a huge dent in Berkshire’s cash pile, which swelled to nearly $150 billion during the pandemic. Buffett, a renowned bargain hunter, has balked at buying stocks trading near record highs, or bidding against private equity firms and special-purpose acquisition companies (SPACs) for acquisitions. However, his recent flurry of purchases and deals suggests he’s overcome those challenges for now.
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