Pre-sale of shares: Warren Buffett buys major again

Now, along with many other investors in sale mode, he is shopping.

What’s Happening: Buffett’s Berkshire Hathaway has just revealed that it has bought nearly 121 million shares of HP worth about $ 4.2 billion, giving Buffett a stake of more than 11% in the technology company.

HP (HPQ) shares rose 14% in pre-market trading on Thursday.
This is the latest in a series of major purchases that Buffett has made over the past month. In March, Berkshire increased its stake in Occidental Petroleum (OXY) and announced an agreement to buy Alleghany Corporation, the insurer, for $ 11.6 billion.

A step back: Buffett, known for his love of the deal, complained that he didn’t notice good investment opportunities for Berkshire Hathaway.

“We find little that excites us,” he wrote in a letter to shareholders in February.

This led him to the madness of making deals during the recovery of the economy from the coronavirus. Last year, low borrowing costs helped push mergers and acquisitions to a record high.

But now, with the war in Ukraine and concerns about how quickly the Federal Reserve is stopping supporting the economy, making it harder for stocks and deals, he seems more inclined to spend big money.

As Buffett measures: Buffett’s conservatism caused a lot of chatter last year. Where was the Oracle of Omaha and what did he expect? But shares of Berkshire Hathaway still rose nearly 30% and the S&P 500 rose 27%.

This year Berkshire looks even better. Its stocks grew by 15%. The S&P 500 has fallen 6% since the beginning of the year.

One major reason is Buffett’s continued commitment to the energy sector, even as other high-end investors try to give their portfolios green makeup. This year, shares of energy companies have soared due to rising prices for oil, gas and coal.

In addition to its nearly 15% stake in Occidental Petroleum, Berkshire owns a stake Chevron (CVX) stock. Shares of Occidental jumped 96% in the first quarter, and Chevron – almost 40%.

Berkshire also has a huge energy subsidiary that owns leading electricity companies such as PacifiCorp and MidAmerican, oil and natural gas pipelines and several renewable energy companies.

Greg Abel, Berkshire’s vice chairman who oversees Berkshire Energy and the company’s other non-financial corporations, was appointed last year to eventually replace Buffett – now 91 – as Berkshire’s CEO.

American oil is falling below $ 100 a barrel

Oil prices are still extremely high. But there has been some relief this week as the West uses more of its stockpile for emergencies.

Last: The International Energy Agency, based in Paris, announced on Wednesday that member states would supply the oil market with 60 million extra barrels of oil from emergency stocks.

Because of this news, oil prices have fallen by more than 5%. US oil futures fell to $ 96 a barrel. Brent crude, the world’s benchmark, fell to $ 101 a barrel.

60 million barrels of oil will be higher than the record 180 million barrels of oil that President Joe Biden recently announced to release from America’s reserves. The United States plans to produce 1 million barrels a day over the next six months.

These steps are designed to help the world wean itself off Russian supplies. The IEA said Russia could be forced to cut its production by 3 million barrels a day this month as it struggles to find buyers after the invasion of Ukraine.

Gasoline prices fell after a reduction in the reserve was announced. On Thursday in the US a gallon of gas cost an average of $ 4.15, compared to $ 4.23 a week ago.

But that decline is unlikely to ease the concerns of consumers, who a year ago paid an average of $ 2.87 a gallon.

At a hearing Wednesday, members of Congress outraged Big Oil executives over the jump in gas prices. They demanded to know why producers are not going faster to increase production.

“Gas prices cannot continue to depend on the whims of autocrats like Putin, who can use oil against us,” said MP Raoul Ruiz, a Democrat from California.

Managers said they were doing their best, but faced a shortage of equipment and a shortage of workers. They also resisted calls from Democrats to abandon shareholder rewards such as dividends and ransoms during the war in Ukraine.

Shell’s exit from Russia cost up to $ 5 billion

When Shell (RDSA) announced that leaving Russia, it was clear that it would be expensive. But the conclusion will be even more expensive than the oil giant originally expected, indicating how the war in Ukraine is destroying world business.
That’s just it: on Thursday, Shell said that as a result of this decision, it will record up to $ 5 billion, which is more than previously reported. The company said Russian write-offs would be about $ 3.4 billion.

As a $ 210 billion firm, Shell will be able to withstand that blow. Also useful? High oil prices that increase revenue and allow companies to make money from their energy trading business.

Oil prices last quarter rose to an average of more than $ 100 a barrel, the highest level since 2014. Shell said it expects oil profits to be “much higher”. It reports first-quarter results next month.

On the radar: Shell has not provided any details about the future of its stakes in Russian projects, including a large liquefied natural gas plant in the east.

Finding a buyer for its contents can be difficult, as Western companies stay away from the Russian energy sector.

Next

Conagra (CAG) and Brands Constellation (STZ) report results to US market opening.

Also today: U.S. unemployment claims for a report last week at 8:30 a.m. on ET.

Tomorrow: The Central Bank of India announces its latest political decision.

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