Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) revealed new positions in three US homebuilders on Monday, sending shares of each company higher as the billionaire bets on the US housing market.
Shares of D.R. Horton (DHI), Lennar (LEN), and NVR (NVR) all rose on Monday after Berkshire revealed the new positions in its latest 13F filed with the SEC. D.R. Horton and Lennar stock rose more than 2%; NVR stock was up more than 1% following the news.
Berkshire’s biggest new position is in D.R. Horton, with the firm holding nearly 6 million shares of the homebuilder worth more than $720 million as of June 30. Berkshire’s holdings in NVR tallied closer to $70 million, with its position in Lennar coming in at around $17 million as of the end of Q2.
These were the only three positions initiated by the firm during the quarter.
In the second quarter, D.R. Horton stock rose 24% while Lennar gained 19%. Over the same period, the iShares US Home Construction ETF (ITB) closed up 21%, outpacing the S&P 500’s gain of 8.5%. The three homebuilders purchased by Berkshire are the three largest holdings in the fund.
Homebuilder stocks have benefitted from a lack of inventory in the US housing market, which has pushed many prospective buyers towards new construction.
Berkshire also cut the bulk of its exposure to gaming company Activision Blizzard (ATVI) and auto maker General Motors (GM) while adding to its holdings in credit card bank Capital One (COF).
Berkshire sold about 70% of its holdings in ATVI and 45% of its stake in GM.
Berkshire previously disclosed the Activision sale in a regulatory filing in July after the company’s deal to be acquired by Microsoft (MSFT) moved closer to a resolution following a court ruling last month.
During Berkshire’s annual shareholders meeting earlier this year, Buffett said he and his partner Charlie Munger, “long have felt that the auto industry is just too tough.”
During the regional bank crisis earlier this year, many observers wondered whether Buffett would step in to bolster troubled firms after the Oracle of Omaha injected capital into Goldman Sachs (GS) and Bank of America (BAC) during the financial crisis.
But outside of increasing its position in Capital One, Berkshire made no major changes to its financial sector exposure. The KBW Nasdaq Bank Index (^BKX) fell 4.2% in the second quarter.
Between 2020 and 2022, Berkshire pared back its holdings in several bank stocks. In the first quarter, it sold out of Bank of New York Mellon (BK) and Minneapolis lender US Bancorp (USB). Over the second quarter, the firm was a net seller of stocks.
As of June 30, Berkshire’s holdings in Bank of America, Citigroup (C), Ally Financial (ALLY), and Jefferies (JEF) remained unchanged.
