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Berkshire Hathaway Invests in Japan

Acquiring a 5% Stake in Five Companies

After staying fairly quiet for most of the pandemic, Warren Buffett’s Berkshire Hathaway made a substantial investment in Japan. On Monday, Berkshire Hathaway announced that it purchased just over 5% of several of the nation’s largest companies: Mitsubishi Corp., Mitsui (MITSY), Sumitomo Corp. (SSUMY), Itochu Corp. (ITOCY), and Marubeni Corp. (MARUY).

Though Berkshire Hathaway did not disclose how much it paid for the stakes in each of the companies, it is estimated that the total outlay came in at roughly $6 billion.

Company Profiles

The five companies have long, notable histories in Japan. Sumitomo even dates back to the 17th century. Each of the firms have investments in a diverse array of sectors, and they all have stakes in energy and mining interests. Additionally, Mitsubishi and Itochu both own large convenience-store chains in Japan.
Berkshire Hathaway may have been attracted to these companies because, in general, their stock valuations are low relative to their profits. Part of this may be because of their exposure to oil and natural-gas fields.

Looking for Unique Opportunities

Berkshire Hathaway said it plans to hold its new investments for the long term, which is generally on par with how Warren Buffett views his holdings. If the price is right, the company may increase its stake in some of the Japanese firms up to 9.9%.

As some US stock indexes top record highs, Warren Buffett is searching for opportunities in less familiar markets, like overseas in Japan.

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