Berkshire expands Lennar position
Berkshire Hathaway increases its Lennar stake with millions in new share purchases
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Key Points
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The purchases were made over three trading days: 695,014 Class A shares on Sept. 17 at an average of $78.98, 1,381,397 shares on Sept. 18 at $76.48, and 667,118 shares on Sept. 21 at $77.74. The Sept. 21 transaction was valued at about $51.9 million.
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After the transactions, Berkshire-affiliated entities reported indirect ownership of 23,719,109 Lennar Class A shares and 528,217 Class B shares.
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The filings identify Berkshire’s National Indemnity and BHG Life Insurance units among the entities holding the Lennar position, rather than Berkshire holding the shares directly.
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Lennar shares were trading near $78 after the buying, below both their 50-day moving average of $84.05 and 200-day moving average of $88.09; the stock’s reported 52-week range was $75.70 to $133.76.
Berkshire Hathaway boosted its stake in homebuilder Lennar by 2.74 million Class A shares in mid-September, pushing its total holdings to 23.7 million shares worth $1.8 billion Yahoo Finance. The purchases, made at prices between $76.48 and $78.98 per share, represent nearly a 10% ownership stake in the second-largest U.S. homebuilder and signal continued capital deployment despite Berkshire's shrinking cash reserves.
The timing of the acquisitions — September 17 through 21 — came right after Lennar posted weaker-than-expected third-quarter earnings CNBC. Lennar shares were trading near $78 after the buying, below their 50-day average of $84.05, suggesting Berkshire saw value in the depressed price.
Steady Buying Across Three Days
Berkshire's purchases unfolded methodically over three trading days Bay Street. On September 17, it bought 695,014 shares at an average of $78.98. The next day brought the largest tranche: 1,381,397 shares at $76.48. On September 21, Berkshire added 667,118 more shares at $77.74, valued at roughly $51.9 million.
After these transactions, Berkshire-affiliated entities — specifically National Indemnity and BHG Life Insurance units — reported owning 23.7 million Class A shares and 528,217 Class B shares Yahoo Finance. The insurance subsidiaries hold the position rather than Berkshire directly, a common tax and regulatory structure for the conglomerate.
Lennar's Earnings Trouble Prompted Bargain Hunting
Lennar disclosed disappointing third-quarter results before Berkshire completed its purchases, creating the opening that caught the conglomerate's eye Pluang. The homebuilder faced mounting cost pressures and softening demand, which depressed its stock price below historical averages. Lennar's 52-week range ran from $75.70 to $133.76, showing how far the stock had fallen from its peak.
Buying at $76 to $79 per share represented a significant discount to where Lennar traded months earlier. The stock's 200-day moving average stood at $88.09, meaning Berkshire captured shares at a 12% discount to that longer-term benchmark — classic value investing in a beaten-down sector.
Berkshire Deepens Its Housing Exposure
This Lennar purchase fits into Berkshire's broader bet on residential construction The Press. The conglomerate already owns Clayton Homes, one of America's largest manufactured housing makers. It has also been reported to be acquiring Taylor Morrison, another major homebuilder, further expanding its footprint in the housing market.
By accumulating a nearly 10% stake in Lennar, Berkshire now has skin in the game across multiple segments of the housing industry. The timing suggests CEO Warren Buffett and his team see long-term value in residential construction despite near-term earnings headwinds and rising interest rates that have pressured the sector.
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