This article first appeared on GuruFocus.
Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) has quietly stepped up its bet on Japan’s trading giants, raising its stake in Mitsubishi Corp. to 10.23% from 9.74% in March and increasing its holding in Mitsui & Co. as well. The moves follow recent regulatory approvals from the US Federal Energy Regulatory Commission, which cleared Berkshire to acquire additional shares earlier this month. While Berkshire’s voting rights in Mitsui remain just under 10%, the firm’s steady accumulation underscores Buffett’s continued interest in Japan’s shosha, a group of diversified trading houses that play a critical role in the country’s economy.
Berkshire’s investments, first revealed in 2020, span all five of Japan’s major trading firms, including Mitsubishi, Mitsui, Itochu, Marubeni, and Sumitomo. These sprawling conglomerates manage businesses as wide-ranging as energy exploration, salmon farming, and convenience retailing, and they have increasingly focused on shareholder returns through buybacks and portfolio realignment to limit exposure to volatile natural resources. Shares reacted positively to Berkshire’s latest purchases: Mitsubishi closed 1.9% higher in Tokyo, while Mitsui, Itochu, and Marubeni each gained about 1.2%, and Sumitomo added 1.1%.
Analysts suggest Berkshire’s steady positioning could draw more investor attention to the sector. Berkshire’s continued ownership has brought renewed attention to the trading houses, said Norikazu Shimizu at Iwai Cosmo Securities, noting that these companies are becoming more proactive about returning value to shareholders. While Buffett initially planned to keep his stakes below 10%, the Japanese firms have since agreed to relax that ceiling moderately, according to Berkshire’s February investor letter. Itochu expects its shareholding ratio to eventually align near the 10% level due to reporting lags, signaling that Berkshire’s gradual accumulation could still have further room to run.
AloJapan.com