Monday, November 14, 2011

Warren Buffett Invested $10.7 Billion in IBM

Warren Buffett just announced that Berkshire Hathaway (BRK-A) (BRK-B) has purchased 64 million shares of International Business Machines (IBM) for a total of $10.7 billion. Buffett started buying in March and now owns 5.5 percent of IBM.

IBM trades at 15 times current earnings and 13 times forward earnings. The dividend, which was raised by15% in May, provides a decent yield of 1.2%. For the latest quarter ending September 30, earnings rose by 7% on a 7.8% growth in revenues. Two research firms initiated coverage on IBM on October 14. Macquarie gave the company a Buy rating and ISI Group gave it a Hold.

In the past, Buffett has shied away from tech stocks although he has owned a couple companies involved in technology in some way, according to the free list of Warren Buffett stocks at For example, Berkshire Hathaway has owned Ingersoll-Rand Plc (IR), which makes temperature control products, electronic locks, portable security systems, remote home management products, and electronic and biometric access control systems and software. The stock has a current price to earnings ratio of 35 and a forward PE of 10. In June, the company raised its dividend by an amazing 71%, from 7 cents a quarter to 12 cents a quarter, giving a current yield of 1.5%.

Berkshire also owns Verisk Analytics, Inc. (VRSK), a provider of proprietary data, analytics methods, and embedded decision support solutions, It trades at 24 times current earnings and 20 times forward earnings, nd dos not pay a dividend.

To see other stocks owned by Warren Buffett's Berkshire Hathaway, go to for a free list that can be downloaded and sorted.

Disclosure: Author did not own any of the above at the time the article was written.


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