Tech

Buffett’s Berkshire invests in Restoration Hardware, whose shares rise

(Reuters) – Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) on Thursday disclosed a new investment in RH (RH.N), boosting shares of the luxury furniture and home furnishings chain once known as Restoration Hardware.

Berkshire owned about 1.21 million RH shares worth $206.3 million as of Sept. 30, according to a regulatory filing detailing Berkshire’s U.S.-listed stocks as of that date.

RH shares rose 6.7% in after-hours trading following the disclosure, after closing up 1.3% at $175.22.

The Corte Madera, California-based company did not immediately respond to a request for comment.

Analysts have said RH has boosted sales and profit margins, in part by expanding its membership program and improving the experience for shoppers in its roughly 70 galleries, though it remains exposed to downturns in the high-end housing market.

RH’s share price has more than doubled since the end of May.

Berkshire also said it owned 7.47 million common shares of Occidental Petroleum Corp (OXY.N) on Sept. 30, less than two months after purchasing $10 billion of preferred stock to help that company buy rival Anadarko Petroleum Corp.

Shares of companies often rise after Berkshire announces new or increased stakes, reflecting investors’ regard for Buffett and the Omaha, Nebraska-based conglomerate he has run since 1965.

Investors monitor Berkshire’s quarterly filings for signs on where Buffett and his portfolio managers Todd Combs and Ted Weschler see value.

Thursday’s filing includes investments by all three but does not say who bought and sold what. Combs and Weschler normally make smaller investments, while Buffett directs big investments such as Apple Inc (AAPL.O) and Bank of America Corp (BAC.N).

The filing reflected Berkshire’s, and Buffett’s, inability to deploy the conglomerate’s cash hoard, whether through acquisitions or equity investments, as U.S. stock indices traded near or set record highs.

Berkshire has more than 90 units including the BNSF railroad, Geico auto insurer, Dairy Queen ice cream and namesake energy, real estate brokerage and auto dealer businesses.

But it ended September with $128.2 billion of cash and equivalents, 6.4 times the minimum $20 billion that Buffett has said Berkshire needs.

Berkshire also reported lower holdings of Apple, oil refiner Phillips 66 (PSX.N), broadcaster Sirius XM Holdings Inc (SIRI.O) and Wells Fargo & Co (WFC.N) as of Sept. 30 compared with three months earlier.

Reporting by Jonathan Stempel in New York; editing by Sandra Maler and Marguerita Choy


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