Warren Buffett is a surprise winner in the electric-vehicle revolution.
Berkshire Hathaway owns stakes in General Motors and Chinese automaker BYD.
Buffett’s company has scored a $6 billion gain on the two stocks in less than five months.
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Warren Buffett’s Berkshire Hathaway is often associated with insurance, railroads, and other humdrum industries. However, the famed investor’s conglomerate is quietly cashing in on one of the hottest sectors around: electric vehicles.
Buffett’s company has notched a $6 billion gain on its General Motors and BYD bets in the past five months alone, as shares in the US and Chinese automakers have surged to record highs.
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The investor enthusiasm reflects GM’s plans to roll out 30 new electric vehicles worldwide by 2025, and BYD’s rapid growth and status as the world’s largest electric-vehicle manufacturer.
Berkshire first invested in GM in 2012, then gradually grew its position to 80 million shares worth $2.4 billion as of September 30 last year.
The automaker’s shares have soared more than 125% since then, boosting the value of Berkshire’s stake to $4.3 billion as of Thursday’s close, assuming the size of its holding hasn’t changed.
Buffett and his team bet on BYD even earlier, snapping up 225 million shares at a cost of around $1 per share in 2008. BYD’s Hong Kong-listed shares now change hands at the equivalent of $34 each, valuing Berkshire’s position at $7.8 billion today.
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The Chinese carmaker’s stock price was under $16 at the end of September, meaning Berkshire’s stake has jumped in value by $4.2 billion, or almost 120% since then.
Combine the $1.9 billion gain on GM with the $4.2 billion gain on BYD, and Berkshire has racked up about $6.1 billion in unrealized gains on those two stakes in under five months.
Buffett has been criticized for not investing in high-flying technology stocks such as Amazon and Alphabet over the past decade. Between Berkshire’s massive Apple stake and its exposure to the electric-vehicle revolution via GM and BYD, the investor won’t be too worried.
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