Billionaire Warren Buffett said Monday he’s not concerned about the recent decline in IBM, in which he’s a large shareholder.
The stock closed Friday at $155 a share, after the tech giant reported quarterly revenue that fell short of estimates. It has dropped about 10 percent since July 20.
Buffett told CNBC’s “Squawk Box” that his ownership cost of IBM stock is around $170 a share.
I love it when it goes down. It means the company buys stock cheap, the Berkshire Hathaway chairman and CEO said.
In perhaps a signal he’s also been a buyer, he added, “It means if I want to buy stock, and you can look at our 13F in a few days … I get to buy it cheaper.” It’s worth noting that he did not say definitively either way whether he’s a buyer.
But he stressed, “I’m not a seller” of IBM—saying he does want the stock to eventually head higher, maybe “five or 10 years from now.”
As of March 31—as reported in Berkshire Hathaway’s 13-F filing on May 15—his company held an 8.12 percent stake, 79.57 million shares. Berkshire is IBM’s largest shareholder, with almost 20 million more shares than the next-biggest investor.
He bought an additional 2.6 million shares in the first quarter, valuing his overall holdings in IBM at $12.3 billion as of Friday’s close.
Buffett also poured cold water on recent speculation that Kraft Heinz, backed by Berkshire and private equity firm 3G Capital, would pursue an acquisition of Mondelez International, the global packaged foodmaker with brands including Ritz and Cadbury.
“At Kraft Heinz, we have our work cut out for us for a couple of years. I think it’s quite unlikely … that Kraft Heinz will be doing a big acquisition in the next couple of years,” Buffett told CNBC. “Somewhere down the road, I won’t be surprised.”
Hedge fund titan Bill Ackman of $20 billion Pershing Square Capital Management disclosed a $5.5 billion, or 7.5 percent, stake in Mondelez last week.
Sources familiar with Ackman’s thinking at the time told CNBC that 3G, through its ownership in Kraft Heinz, would be the most likely buyer should Ackman push Mondelez to pursue an acquisition.
3G was not immediately available to respond to CNBC’s inquiry for comment.
But Buffett said, “It would be hard to make a deal that makes sense,” because food stocks are higher, reflecting expectations of what he called “Kraft Heinz-type margins,” though he said he’s does not seem to see that elsewhere in the industry.
In 2012, Mondelez spun off its grocery business into Kraft Foods Group, which merged with ketchup maker H.J. Heinz earlier this year to form Kraft Heinz.