Berkshire Hathaway Makes New Purchases in the Final Sessions of 2024

Warren Buffett and Berkshire Hathaway spent the last few trading days of 2024 purchasing more shares of an internet company whose stock is trading near its lowest price in seven years. The conglomerate bought 76,487 shares of Verisign through transactions on Thursday, Friday, and Monday for $15.6 million, according to a regulatory filing from Monday evening. Berkshire now owns 13.8% of the company after steadily acquiring shares throughout the month.

Given the relatively small size of the stake, these transactions were likely made by Buffett’s investment lieutenants – Todd Combs and Ted Weschler. Berkshire first bought shares in the tech company in 2013 and has not altered its position since. Verisign, headquartered in Reston, Virginia, provides .com domain registration services. However, the company has had a challenging year, as its pricing structure has been under regulatory scrutiny. The stock ended 2024 unchanged, missing the tech boom driving the bullish market.

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Verisign shares are currently trading at around 24 times expected earnings, after reaching a low of 21 times earlier this year, the lowest price-to-earnings ratio since 2017, according to FactSet. Therefore, it could be argued that Verisign fits Berkshire’s value investing philosophy, focused on cash flow and price-to-earnings and price-to-book ratios.

Some analysts have grown optimistic about Verisign after the Biden administration ultimately renewed its contract with the company, agreeing to negotiate registration pricing. “Now that regulatory concerns are behind us, the focus shifts to domain growth, where data is starting to show improvement,” said Rob Oliver, an equity analyst at Baird, in a note. “We believe that the prospects for a better macroeconomic situation, the potential for marketing channel plans, and the removal of pricing concerns support a higher risk-adjusted multiple.”

Earlier this month, Baird upgraded its rating on Verisign from neutral to outperform, expecting the stock to rise 21% to $250 over the next 12 months. The stock closed Monday at $205.10.