Long Term Stocks

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Two small/mid caps that Berkshire recently started positions in -


https://www.kiplinger.com/investing/stocks/603760/stocks-warren-buffett-buying-selling-q3-2021


>>> Floor & Decor Holdings (FND)

Action: New stake
Shares held: 816,863
Value of stake: $98.7 million

Warren Buffett initiated a stake in Floor & Decor Holdings (FND, $130.00) in Q3, which is very much in keeping with some of his other investments in home retail. Floor & Decor sells hard surface flooring and related accessories primarily through 133 company-operated warehouse store formats.

Buffett bought more than 816,000 shares in the company worth almost $99 million as of Sept. 30. It's a small position, to be sure, accounting for a meager 0.03% of Berkshire Hathaway's total portfolio value. But it still fits nicely with some of Buffett's other holdings and investments.

Berkshire Hathaway, for example, has been building a position in home goods retailer RH (RH) – formerly known as Restoration Hardware – since the third quarter of 2019. And he's made no secret of his love for Berkshire Hathaway's wholly-owned subsidiary Nebraska Furniture Mart.

Floor & Decor thus appears to be a way to play the housing market, albeit with a somewhat oblique, Buffett-style angle.



Royalty Pharma (RPRX)

Action: New stake
Shares held: 13,145,902
Value of stake: $475.0 million

Healthcare typically hasn't represented a large percentage of Berkshire Hathaway's assets, but the holding company usually maintains positions in several of the sector's names. That's still the case following BRK.B's exits in Merck and Organon, as Buffett & Co. have decided to add Royalty Pharma (RPRX, $41.70) into the fold.

That said, RPRX isn't your usual pharmaceutical play.

Royalty Pharma, as the name might indicate, is focused on acquiring biopharmaceutical royalties. It doesn't research or develop drugs – it helps provide capital for the companies that do. As the company explains:

"We fund innovation in the biopharmaceutical industry both directly and indirectly – directly when we partner with companies to co-fund late-stage clinical trials and new product launches in exchange for future royalties, and indirectly when we acquire existing royalties from the original innovators."

Through that model, RPRX has gotten a piece of blockbuster drugs such as AbbVie's Imbruvica, Biogen's (BIIB) Tysabri and Pfizer's (PFE) Xtandi.

Buffett spent $475 million to initiate a stake in RPRX during the third quarter, immediately making him a top-10 shareholder with 3.1% of all shares held. But it's still a relatively meager position within the Berkshire Hathaway portfolio, at less than 0.2% of equity assets.

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