In a recent move closely watched by investors, Berkshire Hathaway Inc . (NYSE:BRKa) has made a significant purchase of Liberty Media Corp (NASDAQ:LSXMK) stock, investing approximately $36.77 million. The transactions occurred over three separate days, signaling a strong vote of confidence in the media company's value from the renowned investment firm.
The buying spree kicked off on March 21, 2024, with Berkshire Hathaway acquiring 333,916 shares at an average price of $28.9224. The purchases continued on March 22, when an additional 742,859 shares were bought at an average price of $28.7462. The final round of buying took place on March 25, with 199,664 shares acquired at an average price of $28.824. These weighted average prices were part of a range in which the transactions occurred, from as low as $28.6150 to as high as $29.1500.
Following these transactions, Berkshire Hathaway's holdings in Liberty Media's Series C Liberty SiriusXM Common Stock have significantly increased. The precise number of shares now owned by Berkshire Hathaway and its subsidiaries stands at a substantial 57,886,716. It's important to note that a portion of these shares are owned by subsidiaries and pension plans of Berkshire Hathaway, as detailed in the footnotes of the SEC filing.
The nature of the ownership of these shares is indirect, as indicated by the footnotes in the SEC filing. Specifically, 43,108,394 of the total reported shares are owned by subsidiaries such as Government Employees Insurance Company, National Fire & Marine Insurance Company, and National Indemnity Company. Additionally, 14,778,322 shares are owned by pension plans of Berkshire's subsidiaries.
Warren E. Buffett, as the controlling stockholder of Berkshire Hathaway, may be deemed to beneficially own the reported securities to the extent of his pecuniary interest therein. However, both Mr. Buffett and Berkshire Hathaway disclaim beneficial ownership of the reported securities except to the extent of this pecuniary interest.
This latest acquisition is part of Berkshire Hathaway's broader investment strategy, which often involves large-scale purchases of stocks in companies they believe are undervalued or have strong future growth potential. The move has been acknowledged with the signature of Warren E. Buffett on March 25, 2024, confirming the transactions on behalf of all reporting persons involved.
InvestingPro Insights
Berkshire Hathaway's recent investment in Liberty Media Corp (NASDAQ:LSXMK) aligns with several key metrics and insights from InvestingPro. With a market capitalization of $9.41 billion and a trailing twelve-month P/E ratio of 11.06, Liberty Media presents itself as a company with a reasonable valuation in the eyes of investors. The P/E ratio, in particular, suggests that the stock might be trading at an attractive price relative to its earnings, which could be a contributing factor to Berkshire Hathaway's decision to increase its stake.
Adding to the company's investment appeal, an InvestingPro Tip highlights that Liberty Media has a high shareholder yield, a factor that could be indicative of the company's commitment to returning value to its investors. Furthermore, analysts' predictions that the company will be profitable this year, coupled with its profitability over the last twelve months, may have been a reassuring sign for Berkshire Hathaway's investment thesis.
On the financial health side, it is worth noting that Liberty Media's short-term obligations exceed its liquid assets, which is a point of consideration for investors. However, the company's stock generally trades with low price volatility, which may appeal to investors looking for stability in their portfolio.
While Liberty Media does not pay a dividend, the growth potential and valuation metrics might be the key factors driving Berkshire Hathaway's interest. For investors intrigued by Berkshire's move and looking for more in-depth analysis, InvestingPro offers additional InvestingPro Tips for Liberty Media. There are currently 5 more tips available, which can be accessed through InvestingPro's platform. Investors interested in these insights can use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
In summary, Berkshire Hathaway's investment in Liberty Media appears to be supported by several positive indicators, including a solid valuation, a high shareholder yield, and a positive profit forecast, which are all factors that could contribute to the long-term value proposition of the stock.
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