|Day's Range||33.50 - 34.50|
Berkshire Hathaway’s Warren Buffett appears to have taken the summer off when it comes to investments, as stakes in RH and Occidental were probably taken by the two portfolio managers who oversees part of Berkshire’s big equity portfolio.
Financial markets are overvalued, according to an Oxford Economics forecast, so don’t expect much in the way of gains for stocks even if a recession is avoided.
(Bloomberg Opinion) -- Warren Buffett’s Berkshire Hathaway Inc. has $128 billion of cash. There is almost no purchase too large for the company — in fact, large is exactly what investors are waiting for. And yet, the only stock Berkshire bought last quarter was a dinky retailer, RH.Berkshire disclosed in a regulatory filing Thursday that it took a $212 million stake in RH, a California-based home-furnishings chain valued at $3.3 billion. Buffett could even buy the entire company and it’d still be a puny deal for him. But it was a big deal for RH, because the shares surged 9% in after-hours trading and held near that level early Friday morning.I admit I didn’t even recognize the retailer’s name at first. RH used to be called Restoration Hardware, a place that sells $6,000 linen sofas and elongated wooden dining tables with “forthright silhouettes.” The company shrank its name and supersized its stores, an effort to target a more upscale clientele. It’s even installed some on-site restaurants, a little nourishment to help one ponder a new addition to the ski house. That’s partly what makes RH such a funny investment for Buffett. Not only is the billionaire known for his down-to-earth lifestyle — he’s lived in the same fairly modest house for more than 60 years — but he’s also usually drawn to businesses that mirror the America he sees from his unassuming Omaha office: railroads, truck stops, Dairy Queens, the Nebraska Furniture Mart. Furthermore, Berkshire tends not to waste time on minority stakes in small, specialty chains; its only other retail holdings are Amazon.com Inc. and Costco Wholesale Corp., companies valued at $870 billion and $134 billion, respectively. RH was the only new position Berkshire took in the latest quarter, aside from buying common shares of Occidental Petroleum Corp., in which it already purchased $10 billion of preferred equity (part of a financing deal to assist the oil and gas explorer in its takeover of Anadarko Petroleum Corp.). All in all, it was another dull period for Berkshire, whose last splashy stock pick was Amazon earlier in the year. With U.S. equities still on the rise, Buffett, 89, and his investing deputies are struggling to find cheap candidates. Whoever made the call on RH — Todd Combs, Ted Weschler or the Oracle himself — he may have had prescient timing. At the end of May, RH’s price-to-earnings ratio hit a low, and the shares have doubled since then, taking a big leg up in September. That said, RH’s overnight gains drove the shares above analysts’ average target level, which is $181 apiece. “The business remains tough to predict and we believe expectations may now be somewhat elevated,” Bobby Griffin, an analyst for Raymond James & Associates who has the equivalent of a “hold” rating on RH, wrote in a Sept. 11 report, citing the China tariffs and a slowdown in high-end U.S. housing. Similarly, Gordon Haskett Research Advisors wrote to clients Sept. 10 that the firm finds other retailers such as Wayfair Inc., Williams-Sonoma Inc. and At Home Group Inc. more attractive. At the end of the day, though, no matter how RH performs, it won’t have much of an impact on Berkshire’s portfolio. Another quarter has passed without a major acquisition by Berkshire, its cash pile hitting a record yet again. RH may sell a $449 wool felt elephant, but it isn’t the kind of elephant Buffett is after. The wait continues.To contact the author of this story: Tara Lachapelle at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Berkshire Hathaway disclosed Thursday that it bought a 1.2-million-share stake in luxury furniture retailer RH, formerly known as Restoration Hardware, during the third quarter, sending the Corte Madera retailer’s shares up 7% in after-hours trading. Berkshire, led by legendary investor Warren Buffett, also trimmed his stakes in Apple and Wells Fargo. Buffett has been steadily selling some of Berkshire’s Wells Fargo shares to keep its stake under 10 percent for regulatory reasons as the bank buys back stock.
The conglomerate led by Warren Buffett revealed new stakes in two companies, according to a filing on Tuesday.
Berkshire Hathaway Inc. revealed new stakes in furniture maker RH and energy company Occidental Petroleum Corp. , according to a filing on Thursday. The conglomerate led by legendary investor Warren Buffett owned about 1.2 million shares of RH, formerly known as Restoration Hardware, and nearly 7.5 million shares of Occidental. It trimmed stakes in Apple Inc. and Wells Fargo , among other companies. In April, Berkshire committed $10 billion to help Occidental's bid for Anadarko Petroleum Corp. , giving Occidental an edge over Chevron Corp , which was also vying for Anadarko and later bowed out. Shares of RH rallied more than 6% in the extended session, while Occidental stock rose 1.6%.
An investment by Warren Buffett’s Berkshire Hathaway boosted shares in upmarket furniture retailer RH, representing one of the most notable purchases by investment managers in the third quarter. Berkshire Hathaway acquired 1.2m shares in RH, previously known as Restoration Hardware. The filing came among the periodic deluge of 13F filings on Thursday, as investment managers revealed their purchases and sales for the third quarter.
Strong core RH business, solid performance of new galleries and continuous expansion of RH Hospitality are likely to help RH to grow further.
Walmart is in buy range while top retail stocks Lululemon Athletica, Costco, RH and Burlington Stores are near buy zones as retailers get ready for a busy holiday season.
RH, formerly Restoration Hardware, has had quite a run since its big revamp two years ago. RH stock is up over 100% since May. Can it keep going?
Is RH (NYSE:RH) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for […]
With the help of our Zacks Stock Screener, we have identified a few retail stocks poised to beat the Zacks Consensus Estimate this earnings season.
Restoration Hardware (RH) is at a 52-week high, but can investors hope for more gains in the future? We take a look at the company's fundamentals for clues.
Skechers' (SKX) focus on new lines of products, cost-containment efforts, inventory management and global distribution platform is likely to show on third-quarter results.
Berkshire Hathaway's third quarter holding are out. The company announced it has taken a $210M stake in RH while trimming its stake in Wells Fargo. Yahoo Finance's Julia La Roche joins The Final Round.