Berkshire increases its purchase of Lennar by 1.68 million shares

Berkshire Hathaway has bought approximately 1.68 million shares of Lennar in the last three trading days, totaling about $136.4 million. Previously, from September 17 to 21, its subsidiary insurance company had purchased about 2.74 million shares of Class A and Class B stock in the open market, totaling about $212.4 million, with a weighted average price mostly between $74.8 and $79.4.

According to the SEC filing on the 4th, Class A shares increased from about 21.32 million shares to about 23.72 million shares, while Class B shares increased from about 462,000 shares to about 528,000 shares, with further sporadic purchases. The holding entities include National Indemnity, BHG Life, Medical Protective, AZGUARD, NorGUARD, WestGUARD, and other insurance subsidiaries. After crossing the 10% threshold, continuous disclosure of transactions is required. The purchase window follows Lennar's announcement on September 16 of its third fiscal quarter: earnings per share of about $1.19 to $1.23, below market expectations of about $1.28 to $1.29, with revenue of about $8.05 billion, a year-on-year decrease of about 8% to 8.6%, and weakened orders and profit margins, with the stock price down about one-third over the past year.

Berkshire already holds D.R. Horton and completed the acquisition of Taylor Morrison for about $6.8 billion in July; it bought Clayton Homes for nearly $2 billion in 2003. Lennar is the second-largest homebuilder in the U.S., headquartered in Miami. Following the disclosure, Lennar's stock rose about 6.6% during trading. At the end of the second quarter, the 13F holdings were about 13 million shares, with an accumulated increase of about 11 million shares this quarter, an estimated increase of about 81% to be reported later.

Berkshire is increasing its holdings in builders under pressure from both housing prices and interest rates using insurance float, while retail investors and active funds are reducing their positions after weak quarterly reports. Funds from public market sell-offs are entering the Omaha insurance subsidiary accounts, concentrating voting rights and economic interests into disclosures above 10%. Beneficiaries are Berkshire's existing float portfolio and short-term buying from following builder ETFs; the pressured parties are new home demand priced according to high interest rates and payment capabilities, and Lennar's operational layer that must deliver quarterly. The event driver is statutory disclosure, not company buybacks.

Source: Public information