Here’s some good news for followers of the Biznews Global Share portfolio. The world’s most successful investor, Berkshire Hathaway chairman Warren Buffett, has bought another 6.5m shares in technology group IBM. Berkshire is the biggest single shareholder in the Ginny Rometty-led business with 7.8% of the equity. IBM is one of five global shares owned in the Biznews portfolio whose value jumped in the past month after a 30% surge in the price of another holding, Amazon.com. – AH
(Bloomberg) — Warren Buffett’s Berkshire Hathaway Inc. increased its stake in IBM by 9.2 percent, affirming support for Chief Executive Officer Ginni Rometty as she tries to reignite growth at the technology company.
Berkshire boosted its stake in International Business Machines Corp. — one of Buffett’s biggest bets — by 6.5 million shares, the Omaha, Nebraska-based company disclosed in a regulatory filing Tuesday. Berkshire remains IBM’s biggest holder with 76.97 million shares for a 7.8 percent stake, according to data compiled by Bloomberg.
IBM’s Rometty is focusing on expanding sales for newer cloud computing and data analytics offerings in order to make up for revenue lost from divesting less-profitable businesses and from weaker demand for older hardware and services. With adjusted profit falling last year for the first time in more than a decade, Rometty has announced partnerships with Apple Inc. and Twitter Inc. and increased investments in the cloud.
IBM, based in Armonk, New York, climbed less than 1 percent to $161.50 at 4:50 p.m. New York time, after the filing was made public.
When Buffett bought his original stake about four years ago, the investment was a departure for the billionaire, who has long said that he avoided buying stocks of technology firms for Berkshire because it was hard for him to understand their business plans and forecast their prospects. In April, after the company reported another quarter of revenue declines, he dismissed speculation that he had soured on IBM.
IBM has fallen below the price Buffett paid for the stake. The stock dropped 14 percent in 2014 for the biggest drop in the Dow Jones Industrial Average for the second straight year.
Most of Berkshire’s holding had been accumulated at an average price of $171.47, according to the company’s annual report last year, which showed the cost of that investment was $11.7 billion.
Rometty surprised investors in October when she ditched a $20-a-share earnings forecast for 2015 that was instated by her predecessor Sam Palmisano. IBM’s stock plunged. In January, IBM issued a new forecast for 2015 operating earnings of $15.75 a share to $16.50 a share. – BLOOMBERG
