Berkshire Hathaway
has boosted its stakes in five Japanese trading companies to an average of 8.5% and Berkshire said it hopes to increase those interests to 9.9%.
Berkshire Hathaway
(Ticker: BRK.B) now holds about $20 billion of the five companies, Barron’s estimates, and those investments have been among the most successful ones for Berkshire CEO Warren Buffett in recent years.
Berkshire initially disclosed its ownership stakes in the five companies –
Itochu
(ITOCY),
Marubeni
(MARUY),
Mitsubishi
(MSBHF),
Mitsui
(MITSY) and
Sumitomo
(SSUMY) in late August 2020 and the five stocks have more than doubled on average.
The average gain is about 170%, we estimate, and Berkshire has effectively realized all of those increases because it hedged its currency exposure. When Berkshire initially disclosed the stakes, its interest in each of the five was about 5% and the total value was around $6 billion.
The five stocks have been strong this year, rising along with the Japanese stock market, with the largest of the five, Mitsubishi, gaining about 50% so far in 2023 and having a market value of $70 billion.
In a press release Monday, Berkshire said that Buffett “has pledged that the company will make purchases only up to an ownership of 9.9% in any of the five investments. The company will make no purchases beyond that point unless given specific approval by the investee’s board of directors.”
These are the only publicly traded investments that Berkshire owns in Japan, the company said. Their total value “considerably exceeds that of Berkshire-held public stocks in any other country” outside the U.S., the firm said.
Berkshire added that Buffett and Greg Abel, a Berkshire vice chairman and head of the company’s vast non-insurance operations, “continue to be delighted with the investments and hope, eventually, to own 9.9% of each of the five companies.”
Buffett and Abel traveled to Japan in April and met with the heads of the five companies and said the stakes had risen to about 7.4%.
Berkshire’s Class-B shares are up 9.5% this year, trailing the
S&P 500
‘s 14.9% gain.
Write to Andrew Bary at andrew.bary@barrons.com
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