Berkshire Hathaway Sells More of Its HP Stock

HP shares closed down 0.3% to $25.64.

Berkshire now owns 106 million shares of HP worth around $2.7 billion, a 10.7% stake.

Berkshire has been steadily reducing its stake in HP during September. Before the sales, Berkshire owned about 120 million shares of HP.

Berkshire accumulated the stake in HP in early 2022 and the sales this month were the first since the company finished buying the stock in April 2022. The recent sales could be an indication that Berkshire CEO Warren Buffett, who oversees the company’s roughly $350 billion equity portfolio, plans to continue reducing the HP stake.

In the past year, Buffett has cut formerly sizable stakes in
U.S. Bancorp
(USB) and
Bank of New York Mellon
(BK).

Buffett likes to buy and sell stock as quietly as possible, but since Berkshire owns a stake of more than 10% in HP, it needs to file with the SEC within two business days of making any changes in the position. 

This means that further Berkshire sales will trigger filings, with Berkshire still owning 10.7% of HP. Berkshire would have to get its holding under 99 million shares of HP, compared with the current 106 million shares, to avoid filings on purchases or sales.

After the initial HP sale recently,  Evercore ISI analyst Amit Daryanani  wrote: “The share sale follows a more challenged quarter with HP lowering FY23 EPS and FCF expectations driven by macro softness and continued channel inventory overhang.”

The analyst and others speculated whether the sales would continue and they have.

Berkshire has been more active in buying and selling stocks in its equity portfolio in recent years than in the past.

Berkshire likely is taking a loss on the HP sale, having purchased the HP stake in the low 30s, Barron’s estimates.

Write to Andrew Bary at [email protected]