The famed investment firm, headed by Warren Buffett until his retirement earlier this year, has increased its stake in Lennar.
The home-building business may be going through a tough time right now, but one of the savviest investors out there believes it’s a good long-term bet. And it’s putting its money where its mouth is.
New filings with the Securities and Exchange Commission show Berkshire Hathaway now owns about 10 percent of the giant home builder, a stake worth about $2 billion, according to the Wall Street Journal.
Under Buffett’s successor as CEO, Greg Abel, Berkshire is continuing to invest in the home building sector as the SEC filings show it also bought additional shares of another big home builder, D.R. Horton. Earlier this year it acquired outright building firm Taylor Morrison in a deal valued at $6.8. Berkshire has owned Clayton Homes, believed to be the largest company in the manufactured home sector, since 2003.
Berkshire, under Buffett and now under Abel, has long operated under a strategy of buying undervalued companies that are solid but are in weak sectors at the present time. “Be fearful when others are greedy and greedy only when others are fearful” is one of Buffett’s most famous quotes.
For the home-building sector, struggling through several years of a slowdown in construction due to high mortgage rates and increased costs, the vote of confidence from Berkshire comes at an especially good time.
