Mw Warren Buffett Is Buying Up Stock In This High-Margin Internet Registry Company

The S&P 500 Index Friday closed down -1.11%, the Dow Jones Industrials Index closed down -0.77% and the Nasdaq 100 Index closed down -1.36%. March E-mini S&P futures (ESH25) are down -1.08%, and March E-mini Nasdaq futures (NQH25) are down -1.30%.

Stocks on Friday settled moderately lower, weighed down by a selloff in the Magnificent Seven technology stocks. Also, higher T-note yields on Friday undercut equity prices. Low volumes and thin trading conditions due to holiday trading this week and next are leading to exaggerated moves in stocks.

The US Nov trade deficit widened to -$102.9 billion from -$98.3 billion in Oct, a larger deficit than expectations of -$101.2 billion, a negative development for Q4 GDP and bearish for stocks.

US Nov wholesale inventories unexpectedly fell -0.2% m/m versus expectations of a +0.1% m/m increase. Nov retail inventories rose +0.3% m/m, which is right on expectations.

Strength in Asian equity markets was supportive of US stocks. China’s Shanghai Composite Stock Index rose to a 2-week high Friday on the prospects of additional stimulus to bolster its economy. Japan’s Nikkei Stock index rallied to a 5-1/4 month high, led by strength in exporters as the yen weakened to a 5-month low against the dollar. Also, better-than-expected economic news on retail sales and industrial production boosted Japanese stocks.

The markets are discounting the chances at 11% for a -25 bp rate cut at the January 28-29 FOMC meeting.

Overseas stock markets on Friday settled higher. The Euro Stoxx 50 rose to a 1-week high and closed up +0.84%. China’s Shanghai Composite Index climbed to a 2-week high and closed up +0.06%. Japan’s Nikkei Stock 225 rallied to a 5-1/4 month high and closed up +1.80%.

Interest Rates

March 10-year T-notes (ZNH25) Friday closed down -7 ticks. The 10-year T-note yield rose +3.4 bp to 4.617%. Mar T-notes Friday posted moderate losses but held above Thursday’s 7-month low. Carryover pressure from weakness in European and Japanese government bonds weighed on T-note prices. 10-year German bunds fell to a 1-1/4 month low, 10-year UK Gilts fell to a 1-week low, and 10-year Japanese JGB bonds dropped to a 13-year low. T-notes are also being undercut on the concern that President-elect Trump’s policy agenda may spark growth and inflation and potentially worsen the US fiscal backdrop. T-notes recovered from their worst levels after a slump in stocks boosted safe-haven demand for government debt.

European government bond yields on Friday moved higher. The 10-year German bund yield climbed to a 1-1/4 month high of 2.403% and finished up +7.3 bp to 2.396%. The 10-year UK gilt yield rose to a 1-week high of 4.645% and finished up +5.8 bp to 4.633%.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its January 30 policy meeting and at 12% for a -50 bp rate cut at that meeting.

US Stock Movers

Mega-cap technology stocks retreated on Friday and weighed on the broader market. Tesla closed down more than -4% to lead losers in the Nasdaq 100. Also, Nvidia closed down more than -2% to lead losers in the Dow Jones Industrials. In addition, Microsoft , Amazon.com , Alphabet , and Apple closed down more than -1%.

Cruise line operators moved lower Friday, with Norwegian Cruise Line Holdings , Carnival , and Royal Caribbean Cruises Ltd closing down more than -2%.

Netflix closed down more than -2% on less-than-favorable reviews for the company’s new “Squid Game Season 2” released Thursday.

Crowdstrike Holdings closed down more than -2% on signs of insider selling after an SEC filing showed CEO Kurtz sold $6.5 million of shares on Monday.

Broadcom closed down more than -2% on signs of insider selling after an SEC filing showed CFO Spears sold $2.89 million shares last Friday.

KKR & Co closed down more than -1% after the Fly reported the company, along with Bain Capital, each offered over $5 billion for Japan’s Seven & I’s non-core assets.

Fastenal closed down more than -2% after announcing that CFO Lweis will resign in April.

Lamb Weston Holdings closed up more than +2% to lead gainers in the S&P 500 after an amended 13D regulatory filing showed Jana Partners LLC reported a holding in the company.

Defensive food-producing stocks rose on Friday due to weakness in the broader market. Hershey Co , Hormel Foods , Mondelez International , Kraft Heinz , Conagra Brands , and General Mills closed up more than +0.3%.

Progyny closed up more than +15% on signs of insider buying after an SEC filing showed Executive Chairman Schlanger bought $2.2 million shares on Thursday.

Amedisys closed up more than +4% after the company and UnitedHealth Group gave themselves more time for UnitedHealth Group to complete the $3.3 billion deal to purchase the company.

VeriSign closed up +0.6% after an SEC filing showed Warren Buffet’s Berkshire Hathaway bought $28.5 million of the stock in the three sessions to Tuesday.

Earnings Reports (12/30/2024)

Gencor Industries Inc (GENC) and Renovaro Inc (RENB).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

Tech stocks fell late Friday afternoon with the Technology Select Sector SPDR Fund (XLK) dropping 1.6% and the SPDR S&P Semiconductor ETF (XSD) declining 1.3%.

The Philadelphia Semiconductor index shed 1.2%.

In corporate news, VeriSign added 0.4% after Warren Buffett's Berkshire Hathaway bought more shares of the company.

Microsoft-backed OpenAI is looking at reorganizing itself to become a Delaware public benefit corporation to raise conventional capital while maintaining a nonprofit arm, according to an OpenAI blog post Thursday. Microsoft shares were falling nearly 2%.

Taiwan's Ministry of Science and Technology said that funding for semiconductors, AI and aerospace could drop by 20 billion Taiwanese dollars ($609.1 million) next year after opposition parties approved laws cutting economic and technology spending, Reuters reported. Shares of Micron , Nvidia and Taiwan Semiconductor fell 1.2%, 2.3% and 0.8% respectively.

Grid Dynamics shares jumped 8.2% ahead of its inclusion into the S&P SmallCap 600 index next week.

Tech stocks fell late Friday afternoon with the Technology Select Sector SPDR Fund (XLK) dropping 1.6% and the SPDR S&P Semiconductor ETF (XSD) sliding 1.3%.

The Philadelphia Semiconductor index shed 1.2%.

In corporate news, VeriSign added 0.4% after Warren Buffett's Berkshire Hathaway bought more shares of the company.

VeriSign shares were 0.6% higher Friday after Warren Buffett's Berkshire Hathaway disclosed it acquired more shares of the internet company.

Berkshire spent close to $30 million to buy 143,424 shares of the company from Dec. 20 to Dec. 24, according to a securities filing Thursday.

Berkshire now holds over 13.1 million VRSN shares, the filing showed.

Ed Lin

Warren Buffett's Berkshire Hathaway has increased its overall stake in VeriSign, a provider of Internet domain-name registry services.

Berkshire Hathaway insurance unit Geico and pension plans of other Berkshire Hathaway businesses bought a total of 143,424 VeriSign shares from Dec. 20 through Tuesday for a total of $28.5 million, an average price of $199.05 each. Geico added 14,921 of the shares to lift its investment to 7,920,402 VeriSign shares, while the pensions bought 128,503 shares to boost their stake to 5,272,947 VeriSign shares.

Overall, Berkshire Hathaway now owns 13,193,349 VeriSign shares, according to a form Buffett's firm filed with the Securities and Exchange Commission. It remains the largest shareholder with a stake of more than 10%.

Berkshire Hathaway didn't immediately respond to a request for comment on the stock purchases.

VeriSign stock has been flat so far in 2024, while the S&P 500 has surged 25%. Shares have badly underperformed the index in recent years as well. Since the end of 2019, VeriSign stock gained 6.6%, while the S&P 500 has soared 86%.

Berkshire Hathaway also bought more VeriSign stock earlier this month, along with shares of Occidental Petroleum and satellite-radio firm Sirius XM Holdings.

Inside Scoop is a regular Barron's feature covering stock transactions by corporate executives and board members — so-called insiders — as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Ed Lin at edward.lin@barrons.com and follow @BarronsEdLin.

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