The stock of HP Inc (HPQ.N) rocketed to a new high on Thursday after Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) announced it had purchased an 11.4 percent stake in the producer of personal computers and printers for $4.2 billion.
Berkshire disclosed its ownership of roughly 121 million HP shares in a regulatory filing on Wednesday night, including 11.1 million purchased this week.
HP shares closed at $40.06, up to $5.15, or 14.8 percent, after reaching $41.46 earlier.
Berkshire Hathaway’s stock prices regularly climb when the company announces new investments, which is seen as a seal of approval from Buffett.
Despite owning a $161.2 billion holding in Apple Inc. by the end of 2021, Berkshire Hathaway does not invest in technology businesses on a regular basis (AAPL.O). Buffett sees Apple as a consumer-oriented corporation that he can understand.
In a statement, HP added, “Berkshire Hathaway is one of the world’s most regarded companies, and we welcome them as an investor.”
HP may appeal to Berkshire since it is aggressively returning capital to shareholders through stock buybacks and greater dividends, according to Morningstar analyst Mark Cash.
“HP operates in markets where it’s difficult to (durably) grow at high rates, therefore the best way to reward shareholders is to focus on margins and returns,” Cash added. “HP can be considered a value play in the tech world.”
In 2021, Berkshire Hathaway repurchased $27 billion of its own stock.
