HP Soars as Berkshire Reveals Stake in Laptop Maker

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HP Soars as Berkshire Reveals Stake in Laptop Maker
Credit: © Reuters.

By Dhirendra Tripathi

Investing.com -- HP Inc (NYSE: HPQ ) stock surged 13% in premarket trading Thursday on disclosures that Warren Buffett has taken a roughly 11.4% stake in the maker of laptops, printers and other peripherals.

Berkshire Hathaway (NYSE: BRKa ) disclosed on Wednesday that it has purchased nearly 121 million of HP’s 1.05-billion share base. The holding is valued at about $4.2 billion based on the personal computing company's closing stock price on Wednesday of $34.91.

The HP stake is Berkshire's third big investment since February 26, when Buffett said in his annual shareholders letter that "internal opportunities deliver far better returns than acquisitions" and little "excites us" in equity markets. He recently said that American stocks were overvalued.

On March 21, Berkshire agreed to buy insurance company Alleghany (NYSE: Y ) Corp for $11.6 billion in cash. Earlier in the same month, Berkshire revealed a 14.6% stake in Occidental Petroleum (NYSE: OXY ), spending over $6 billion for its stake in the energy firm.

Buffett has mostly shied from investing in technology companies even though his Apple (NASDAQ: AAPL ) investment has been one of his “Big Four” companies, others being Berkshire's insurers, the BNSF railroad, and Berkshire Hathaway Energy. Buffett has pledged to keep at least $30 billion of cash on hand, according to Reuters.

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