Daily Management Review

Warren Buffett invests in pharmaceutics


American billionaire investor Warren Buffett invested $ 360 million in the purchase of shares in the Israeli pharmaceutical company Teva, which caused a revival in the stock market. Teva’s shares jumped in price by 11%, raising the quotes of other pharmaceutical companies.

Last night, Warren Buffett's investment company Berkshire Hathaway notified the American regulators (SEC) that it bought 18.9 million shares of the Israeli pharmaceutical company Teva for $ 358 million, thus adding this pharmaceutical producer to its investment portfolio. In addition, Warren Buffett increased his investments in Apple, buying another 31.2 million shares. It is reported that Berkshire almost completely got rid of IBM shares. Recall that if in the middle of last year it owned 37 million shares of this high-tech company, then by the end of the year the volume fell to 2 million.

Berkshire Hathaway’s notice to the SEC caused a noticeable stir in the business media and among investors. It has long been known that Warren Buffett prefers to buy small stakes in companies without focusing on any one company or sector. The high degree of diversification of the Berkshire Hathaway investment portfolio and the in-depth analysis of the companies' potential is one of the hallmarks of Warren Buffett's strategy, through which he was dubbed the "investment guru". That's why every Buffett investment decision, especially related to adding new companies to the portfolio or removing shares from other companies, causes an instant reaction of the stock market. This time, the news that Warren Buffett added shares of the large pharmaceutical manufacturer to Berkshire's portfolio, led Teva shares to jump in price by 11%. In addition, Buffett's interest in the pharmaceutical company has also provoked optimism among investors in other large companies in this sector - Novartis, AstraZeneca, Takeda, Sanofi and many other large pharmaceutical corporations' quotations increased by 1.2-2.3%.

At the same time Buffett's bid for the pharmaceutical market cannot be called unexpected. In late January, Berkshire Hathaway, along with JP Morgan and Amazon, announced plans to establish a joint company that will carry out research and development in the field of health. It was reported that the activities of this joint company will be aimed not at making profits and doing business, but at reducing the costs of maintaining the health and treatment of employees of the three companies, which employ about 1.1 million people in total. "The rising prices for medicine in the US behave like insatiable worms, biting into our economy," Warren Buffett said at the time. "So far, we cannot offer an explicit answer to this problem. However, we do not want to put up with this as something inevitable. We want to find together a solution that would provide talented people with quality medical services, while keeping the costs of these services under control. "

source: cnn.com

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