There may be several reasons why Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) continues to buy shares of PC maker HPQ despite the industry’s long slump that led to a drop in sales and profits.Berkshire said Monday it has increased its stake in HP by 16 percent in a 13th-floor document filed with the Securities and Exchange Commission. Berkshire, led by Buffett, now owns a 12% stake in HP. It is one of Berkshire’s top ten stocks. (Buffett originally unveiled an 11% stake in HP in April 2022) Experts say HP’s capital allocation could be an investment forum where Buffett increased his stake. HP is implementing the largest treasury stock purchase program (based on market capitalization) within our coverage, so I think Berkshire’s participation is reasonable. – Amit Daryanani, analyst at Evercore ISI
In 2020, HP’s new CEO, Enrique Lores, has launched a $15 billion treasury stock purchase plan. Under the direction of Lores, it bought about $13 billion in treasury stocks by January 31, 2023, thereby reducing the number of issued shares to increase net profit per share and supporting stock prices.Meanwhile, in 2022, HP acquired Poly, a business environment technology distributor, for $3.3 billion to further strengthen its position in the hybrid business environment.Buffett has long liked companies to expand their competitiveness. We view Berkshire’s investment as a validation of HPQ’s strategy/recovery program. – Amit Daryanani
In 2020, HP’s new CEO, Enrique Lores, has launched a $15 billion treasury stock purchase plan. Under the direction of Lores, it bought about $13 billion in treasury stocks by January 31, 2023, thereby reducing the number of issued shares to increase net profit per share and supporting stock prices.Meanwhile, in 2022, HP acquired Poly, a business environment technology distributor, for $3.3 billion to further strengthen its position in the hybrid business environment.Buffett has long liked companies to expand their competitiveness. We view Berkshire’s investment as a validation of HPQ’s strategy/recovery program. – Amit Daryanani
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