Berkshire Hathaway, other big investors hike GM stakes
DETROIT -- Harris Associates LP, State Street Corp. and Berkshire Hathaway Inc. led purchases of General Motors stock last quarter as the U.S. government continued selling shares and GM rejoined the Standard & Poor's 500 Index.
Harris, a Chicago-based investment-management firm, purchased 51.9 million shares during the quarter, the largest increase among GM's shareholders, according to data compiled by Bloomberg News. Harris vaulted to the No. 5 GM shareholder. Michael Neary, a Harris spokesman, declined to comment.
State Street, a financial holding company based in Boston, was the second largest buyer of GM during the quarter with 17.4 million shares followed by Warren Buffett's Berkshire Hathaway buying an additional 15 million shares, Blackrock Inc.'s 13.9 million and Vanguard Group Inc.'s 11.7 million.
"The big thing would have been getting back in the S&P," said Kevin Tynan, an auto analyst for Bloomberg Industries in Skillman, N.J. "Index funds and such must buy stocks included in the index."
GM's largest shareholders, in order, are the U.S. government, the UAW's retiree health care fund, the Canadian government, Capital Group, Harris, BlackRock, Berkshire Hathaway, JP Morgan, Vanguard and State Street.
GM is introducing 18 new and refreshed vehicles this year in the United States, transforming its lineup into one of the newest in the industry from the one of the oldest.
The redesigned vehicles include the Chevrolet Silverado, among GM's most profitable vehicles, and the Impala, which received Consumer Reports magazine's highest rating among all sedans, marking the first time in at least 20 years that a U.S. automaker has outscored all Japanese and European competitors in that segment.
The new products along with the U.S. government's announced plans to exit its ownership of GM have given investors increased confidence in the company.
GM shares surged 23 percent this year through yesterday, compared with an 18 percent increase for the S&P 500. GM shares closed down $1.02, or 3 percent, at $34.55 in New York Stock Exchange trading today.
The automaker returned to the S&P 500 during the second quarter, a milestone triggered in part by the U.S. Treasury reducing its GM stake. Shares on May 17 topped the $33 initial public offering price for the first time in two years, and a union retiree medical trust has begun selling its stock.
The inclusion in the S&P 500 "can be perceived by the market as an inherent confidence in the company," Tynan said.
Berkshire Hathaway hiked its stake in GM by 60 percent to 40 million shares in the second quarter -- enough to give it nearly a 3-percent stake in the company.
Buffett acquired the new GM shares as the U.S. Treasury continues to unload its stock holdings in the company following the federal government's $49.5 billion bailout of GM in 2008-09.
Berkshire Hathaway initially acquired 10 million GM shares in 2012 when the company's shares were trading in the low $20 range.
At current prices, Berkshire Hathaway's GM stake is worth more than $1.4 billion. GM has a current market cap of about $47.8 billion.
Buffett is well known as a value investor with patience and a long-term view of equity markets.
Berkshire Hathaway is also a partial owner of BYD Co., a Chinese automaker that specializes in electric vehicles.
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