3 Reasons Why Legend Investor Buffett buys $4.2 billion of HP?

Warren Buffett's annual shareholder meeting will be held on April 30, 2022.  Finally the offline meeting is going to be held again.

Fortunately, the $Berkshire Hathaway(BRK.A)$‘s performance of last year till now has been very good. 

In 2021 which rose by 29%, outperforming $DJIA(.DJI)$ and $S&P 500(.SPX)$ properly.

In the first quarter of 2022, it rose 17% against the market, and Buffet once becoming The Only One Assets Grows Among Top 10 Richest Men in 2022

While in 2019 when the big carnival for technology stocks , and the pandemic shock in 2020, $Berkshire Hathaway(BRK.A)$ has been underperformed the broader market for two consecutive years.

Buffett's company once held a disproportionately large percentage of cash, but since 2021, they have been buying some stocks. 

The latest big move is Berkshire purchased a total of 11 million shares of $HP Inc(HPQ)$ 4 times according to the disclosure from SEC on April 4th to 6th.

Together with the initial holding of 109 million shares, Berkshire held a total of 11 million shares. HP's 120 million shares made it the second-largest technology stock after $Apple(AAPL)$ . The shares were worth about $4.2 billion at Wednesday's closing price.

After the news came out, HP surged 14.75% on Thursday, and Buffett earned $650 million overnight.

As we all know, Buffett does not favor technology stocks much. The $IBM(IBM)$ that opened a position in 2011, but was trapped for five years.

Until he made hundreds of billions of dollars in Apple that the former shame of the "blind spot of technology stocks" was finanly wiped out.

Why this time adding HP? The market gives the following reasons:

1. Stability 

In terms of performance in the past five years, the company's revenue has exceeded market expectations for eight consecutive quarters. .

According to its first-quarter earnings report, HP said sales of commercial computers and printers rose 26 % and 9% y-o-y, respectively, and the profits were also higher than analysts’ estimates.

2. Cheap

Some analysts believe that HP's forward price-earnings ratio is 8.5, while the forward price-earnings ratio of the Standard 500 index is 18.2, and from Wednesday's close, HP's gains in the past year have lagged the S&P 500 index.

Analysts said HP was trading below its intrinsic value and gave a fair market price of $51.39 per share.

3. Continual Share Repurchase

As a company that focuses on shareholder returns, HP has been repurchasing its own stock. In fiscal 2021, which ended in October last year, HP repurchased a total of $6.2 billion in stock, an increase of 100% from $3.1 billion the previous year. . During the quarter, HP repurchased another $1.8 billion in stock.

According to statistics, HP's dividend yield in the past 12 months has exceeded 2%, the repurchase yield has reached 19.3%, and the comprehensive shareholder yield has been as high as 21.9%.

So I would like to ask you a small question:

  • Have you followed Buffett in the past year? How are the benefits?
  • What do you think of Buffett's position in HP?
  • Do you think now is a good time to buy HP?
  • ......

Share your opinion and you will earn tiger coins!

$Berkshire Hathaway(BRK.B)$ $Berkshire Hathaway(BRK.A)$

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Comment1619

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  • SR050321
    ·04-11
    TOP
    Warren Buffett highly respected by many, his quotes simple yet applicable to many investors. He bought $HP Inc(HPQ)$ because he believe in its future value, when the news out HP share price increased!
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  • Zarkness
    ·04-11
    TOP
    I didnt follow buffett last year . buffett position in hp is a great buffer for hp name and brand. Its never a bad time to buy Hp. can accumulatE slowly
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    • Seong835451
      Good buy👍👍👍
      04-11
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  • SG 88
    ·04-11
    TOP
    Warren's forward looking visionary investor are upmost admirable. With $HP Inc(HPQ)$ , favouring share buy back of $4 billion and PE of 8x, plus a 2.15% dividend yield, no wonder Warren's favourite
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    • HY1986
      😁
      04-12
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  • LeeJC
    ·04-11
    TOP
    With the economy in a strong position but with rising interest and inflation rate, a stable cash generating asset was needed, thereby HP with Recurring revenues
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  • 合群
    ·04-11
    TOP
    重视巴菲特的价值投资,观望中 [微笑]
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  • WingCheong
    ·04-11
    TOP
    When Warren Buffett made such a big chunk of HPQ, investors tend to follow. Buffett's purchase in HPQ is believed to be a long term one until it reaches or exceeds its fair market price level.
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  • Im Kamal
    ·04-11
    TOP
    A good and consistent eps make this gentlemen run into portfolio with HP
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  • luckyone
    ·04-10
    TOP
    buffett doesn't seem to like Tech much (he said Bitcoin is rat poison squared). maybe it's a sign for HP?....
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  • angck
    ·04-10
    TOP
    Hmmm is it the right time to follow?
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  • 天空之羊
    ·04-10
    TOP
    没跟巴菲特,跟自己 [开心]
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  • jw_la
    ·04-10
    TOP
    I am not favorable on hp products, hence I would not follow this move.
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  • bwjx
    ·04-10
    TOP
    Seems like buy the rumour and sell the news for $HP Inc(HPQ)$ . [Happy] I will see if there's buyer support at lower prices. Not in a rush to jump in the rally.
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  • MojoStellar
    ·04-10
    TOP
    WB has strong foresight on his stock investment
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  • 散修2706
    ·04-10
    TOP
    这就是打印机的可口可乐,口乐喝完了要再买,墨合用完会再买!
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  • Chilli Padi
    ·04-09
    TOP
    It is good to assimilate his model, buy good compsnies long term-he sold his position in Kirby only after 35 yrs. He stsys convicted to his course, adding shares in co he believes in. Stay invested LT
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  • Gackky
    ·04-09
    TOP
    following blindly without dyodd, regardless an established investor like Buffet or ur neighbour/ friends or self claimed guru in social media, is just like buying a lottery ticket and hope to win big
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  • GrumpyDino
    ·04-09
    TOP
    I think it's hard to follow him exactly, given the sheer volume of his investments. However, I think it's definitely worthwhile to try to follow the principles he abides by when investing!
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  • setia100
    ·04-09
    TOP
    Following Buffet would mean you were at least 3months to a yr lagging behind him. He was laughing his way to the bank but you were still servicing your debts if not sitting tie n banging balls 😂
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  • HelenJanet
    ·04-09
    TOP
    I don’t really follow Buffett in the past year. I only know the biggest and longest stock he has are $Bank of America(BAC)$ $Apple(AAPL)$$Coca-Cola(KO)$. I will not follow him to buy HP.
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    • HelenJanet
      I still prefer Bank of AmerIca as it is cheaper and it is a long term investment with good dividends.
      04-09
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    • LuckyPiggieReplying toHelenJanet
      BAC no cheap [Grin] DBS is cheaper [LOL] And yes I have BAC too. [Like] but Red at the moment [Cry]
      04-09
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    • HelenJanetReplying toLuckyPiggie
      I agree with you DBS is cheaper. Hahaha. My BAC stocks is also red, will try to average down when it drop to below $39.
      04-09
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    View more 3 comments
  • Boo2020
    ·04-09
    TOP
    Following him without a valid reason is not wise as by the time it's announced, price would have gone up. if the price crash, u d panic and sell. If wanna follow him, just buy Berkshire Hathaway!
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