On Wednesday, Warren Buffett, the Chairman and CEO of Berkshire Hathaway Inc. (BRK.A) (BRK.B), announced an acquisition to buy The Omaha World-Herald Company, publisher of Nebraska’s principal daily newspaper. The deal would add the World-Herald, six other daily newspapers and several weekly newspapers to its current portfolio of media business, which includes Business Wire, Buffalo News and Washington Post Co. (WPO).
Buffett is known for cherry-picking big businesses. This acumen has helped him to build a conglomerate of this behemoth size, which houses over 70 different businesses. Over decades, Berkshire has become a mature company, which generates substantial cash quarter after quarter, keeping Buffett on continuous hunt to seek attractive investments in order enhance stockholder value.
In an effort to diversify its investment, Buffett focuses on a combination of both big and small companies. This is validated by the recent acquisition worth $150 million, which could be categorized as a small investment compared to other recent big ones including chemical maker Lubrizol Corp. for $9.7 billion and railroad company Burlington Northern Santa Fe Corp. for $26.5 billion. Berkshire did not make any significant business acquisitions in 2009, but it acquired a number of small businesses in 2008 for a total cost of $6.1 billion.
Buffett follows the similar strategy (a combination of big and small) for his investments in equities of other companies. This is confirmed by his recent $10.7 billion investment in tech giant International Business Machines Corp. (IBM) while at the same time smaller investments, between $195 million and $232, million in Intel Corp. (INTC), drug store chain CVS Caremark Corp. (CVS), broadcaster DIRECTV, Inc. (DTV), Visa, Inc. (V) and defense group General Dynamics Corp. (GD).
Buffett's investable assets, which ended the third quarter at $34.8 billion, got replenished with the $3.3 billion payment from General Electric Co. (GE) in October. Moreover, it has been heard Buffett saying that he was quite comfortable to spend $8-10 billion on right investment. Consequently, we expect to hear some big acquisition news from Berkshire soon.
BERKSHIRE HTH-A (BRK.A): Free Stock Analysis Report
BERKSHIRE HTH-B (BRK.B): Free Stock Analysis Report
CVS CAREMARK CP (CVS): Free Stock Analysis Report
DIRECTV (DTV): Free Stock Analysis Report
GENL DYNAMICS (GD): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
VISA INC-A (V): Free Stock Analysis Report
WASHINGTON POST (WPO): Free Stock Analysis Report
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