The Oracle of Omaha’s Berkshire Hathaway Inc. is betting on Barrick Gold Corp., sending shares of the world’s second-largest gold miner surging Monday.
In a regulatory filing, Warren Buffett’s Berkshire disclosed the company had taken a 20.9 million share stake in the miner during the second quarter, accounting for about 1.2 per cent of shares outstanding.
The moves makes Barrick the 22nd-largest investment in Berkshire’s portfolio of publicly-traded companies, dwarfed by Buffett’s stakes in the like of Apple Inc., Bank of America Corp. and Coca Cola Co. It remains unclear if Buffett personally made the call to invest in Barrick, or if the decision was made by one of his lieutenants.
The move is something of a divergence for Berkshire, as Buffett has long been a skeptic when it comes to gold, panning it as an unproductive asset. Buffett has long held that he would rather invest in an index fund or real estate than to buy in to the precious metal.
While gold has not been in Berkshire’s traditional investment playbook, Barrick does fit the bill with Buffett’s long track record of targeting dividend-paying stocks. The miner boosted its quarterly payout 14 per cent to eight cents a share after bullion’s meteoric rise sent profit surging.
While Berkshire famously doesn’t pay a dividend of its own, Buffett has consistently invested in companies that generate consistent payouts.
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