HP Inc shares jumped to a record high Thursday after Berkshire Hathaway Inc, the company owned by billionaire Warren Buffett, said it had taken an 11.4% stake for about $4.2 billion in the computer and printer maker.
Citing Reuters, Berkshire disclosed in a regulatory filing late Wednesday that it owns nearly 121 million shares of HP, including the 11.1 million it bought this week.
HP shares closed up US$ 5.15, or 14.8%, at US$ 40.06, after previously rising to US$ 41.46. The company's stock price often rises when Berkshire discloses new stock, which is seen as Buffett's stamp of approval.
Berkshire doesn't regularly invest in tech companies, despite ending 2021 with a $161.2 billion stake in Apple Inc. Buffett sees the iPhone maker more as a consumer company he can understand.
"Berkshire Hathaway is one of the most respected investors in the world and we welcome them as investors," HP said in a statement.
Split in 2015 from the previous Hewlett-Packard, HP is benefiting from increased demand as people spend more time working and homeschooling.
The Palo Alto, California-based company last month agreed to buy audio and video accessories maker Poly, formerly known as Plantronics, for $1.7 billion.
Buffett has struggled to invest Berkshire's money, which totaled $146.7 billion by year's end, citing high valuations and competition from private equity and other investors.
But last month, the Omaha, Nebraska-based conglomerate said it had committed about $22 billion to a major new investment.
These include a 14.6% stake in Occidental Petroleum Corp and the $11.6 billion purchase of insurance company Alleghany Corp, Berkshire's biggest acquisition since 2016.
Berkshire also has dozens of businesses including Geico auto insurance and BNSF rail.
Morningstar analyst Mark Cash said HP may be attractive to Berkshire because HP is aggressively returning capital to shareholders through share buybacks and higher dividends.
"HP operates in a challenging market to grow at a high rate, so focusing on margin and returns is the best way to reward shareholders," said Cash.
"In technology, HP can be considered a value game."
Berkshire bought back $27 billion of its own shares in 2021.
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