Key facts
- Berkshire Hathaway nearly doubled its stake in homebuilder Lennar since the end of June.
- Berkshire Hathaway now holds about 25.4 million shares of Lennar, representing nearly an 11% stake.
- The stake in Lennar is valued at around $2.1 billion.
- Berkshire Hathaway spent approximately $349 million on Lennar stock between September 17 and 25.
- Lennar shares have fallen 21% this year to about $82.
- Warren Buffett stepped down as chairman of Berkshire Hathaway on September 18.
Berkshire Hathaway has significantly increased its investment in homebuilder Lennar, a move consistent with its long-standing value-investing strategy, even as Warren Buffett has transitioned out of his leadership roles.
The conglomerate, led by new CEO Greg Abel, boosted its stake in Lennar from approximately 13.4 million shares at the end of June to 25.4 million shares by September 25. This nearly 11% holding is valued at around $2.1 billion. Berkshire spent about $349 million on the additional shares in the week following Buffett's departure as chairman on September 18.
Lennar's stock has fallen 21% this year, trading around $82, less than half its peak price from two years ago. The company, the second-largest homebuilder in the U.S., has been impacted by a cooling housing market, rising borrowing costs, and persistent inflation fears, which have exacerbated affordability issues for potential buyers.
Buffett built his reputation by acquiring undervalued companies and holding them for the long term. While Buffett retired as CEO at the start of the year and stepped down as chairman in September, this investment in Lennar aligns with his established approach. The size of the stake suggests that investment manager Ted Weschler may be spearheading this particular investment, likely with the approval of Abel.