Buffett buys big stake in Exxon Mobil
Warren Buffett’s Berkshire Hatha
way Inc. on Thursday disclosed a new US$3.45-billion stake in Exxon
Mobil Corp., after buying 40.1 million shares in the world’s largest publicly traded oil company.
Although the investment represents less than 1% of Exxon’s shares, it signals Mr. Buffett’s approval of one of the world’s largest and most profitable companies.
Exxon shares rose 0.7% in afterhours trading following the disclosure.
“He likes buying big, established global brand names, and Exxon is a good flight-to-quality stock,” said Fadel Gheit, senior oil analyst at Oppenheimer & Co., referring to Mr. Buffett. Mr. Gheit has a “perform” rating on Exxon.
“The stock has also lagged the market in the last three and five years. That makes it a typical Warren Buffett holding.”
The Exxon purchase was disclosed in a U.S. Securities and Exchange Commission filing that detailed US$92-billion of Berkshire equity investments, mostly listed on U.S. exchanges, as of Sept 30.
Exxon spokesman Alan Jeffers said: “We appreciate the confidence investors have in ExxonMobil when they decide to invest in the company.”
Berkshire already has energy and utilities businesses, including MidAmerican Energy, which is spending US$5.6-billion to buy Nevada utility NV Energy Inc.
Debbie Bosanek, an assistant to Mr. Buffett, did not immediately re-
spond to a request for comment.
U.S. regulators require large investors to disclose their stock holdings every quarter, and the disclosures can offer a window into their strategies for buying and selling stocks.
Mr. Buffett sometimes gets SEC permission to delay disclosures so that he can buy stocks without having investors copy him. He had done this for the second quarter of this year, and revealed on Thursday that Exxon purchases took place during that period.
The second-richest American typically makes Berkshire’s largest investments, while other investments are made by portfolio managers Todd Combs and Ted Weschler, who oversee several billion dollars each. Berkshire’s quarterly filings do not reveal who buys or sells what.
Among the other disclosed changes was a 44% drop from the prior quarter in its share stake in another oil company, ConocoPhillips.
In Thursday trading, Berkshire’s Class A shares closed up 0.7% at US$173,320, and its Class B shares rose 0.8% to US$115.69.