Warren Buffett betting on big homebuilders while cutting GM stake

Berkshire Hathaway, the conglomerate run by billionaire Warren Buffett, on Monday disclosed new investments in the homebuilders DR Horton, Lennar and NVR.

The investments were disclosed in a regulatory filing that detailed Berkshire’s US-listed stock holdings, which comprise most of its $353.4 billion equity portfolio, as of June 30.

All were made during the second quarter, a down period for Berkshire’s homebuilding and remodeling businesses such as Clayton Homes, Benjamin Moore paint and Johns Manville insulation as rising interest and mortgage rates slowed demand.

But Berkshire said those effects have been partially offset by new construction activity resulting from low inventory of existing homes for sale, an environment that could benefit homebuilders.

Berkshire said that as of June 30, it owned about 5.97 million DR Horton shares worth $726.4 million, about 153,000 Lennar shares worth $17.2 million, and 11,112 NVR shares worth $70.6 million.

The filing does not say which investments are Buffett’s and which are from his portfolio managers Todd Combs and Ted Weschler.

Larger investments are usually Buffett’s, and investors often try to piggyback on Berkshire’s moves, reflecting Buffett’s reputation as an investor.

Shares of DR Horton rose 2.8% and Lennar rose 2% in after-hours trading. NVR’s stock price tops $6,000 and its shares therefore trade more thinly.

Berkshire also owns dozens of operating businesses including the Geico car insurer, BNSF railroad, several energy, utility and industrial companies, and consumer brands such as Dairy Queen, Duracell, Fruit of the Loom and See’s Candies.

Despite the new investments, Berkshire was a net seller of stocks in the quarter, buying $4.6 billion and selling $12.6 billion from its $353.4 billion equity portfolio.

The selling included 45% of Berkshire’s stake in General Motors, whose shares fell 1% after hours.

For all of 2023, Berkshire has sold $18.4 billion more stocks than it has bought. Its largest stock holding by far remained its $177.6 billion stake in Apple.

Among the other second-quarter changes disclosed on Monday, Berkshire added to its stake in Capital One, reduced its stakes in Celanese and Globe Life, and exited holdings in Marsh & McLennan, McKesson and Vitesse Energy.