Berkshire Hathaway Is Buying Up Shares of This Beaten-Down Stock. Should You Invest Too?
2026-10-03 19:16
•Matthew Benjamin •The Motley Fool
• •••• Axe Cap view
Is Berkshire’s Bet on Troubled Lennar a Signal for SA Investors?
Berkshire Hathaway’s purchase of Lennar shares highlights a classic value play amid a weak housing market, worth a look from a South African perspective.
Berkshire Hathaway’s recent $2.2 billion buy into Lennar, a US homebuilder battered by soaring mortgage rates and a sluggish housing market, shows a willingness to back a recovery others doubt. Lennar’s share price has tumbled over 30% in the last year, reflecting tough times for builders everywhere. While South Africa’s housing market faces different challenges — like local credit growth constraints and consumer pressures — the underlying lesson rings true: patient value investing can pay off when others shy away. For local banks such as Nedbank and Standard Bank, which have exposure to home loans, a rebound in property demand is a crucial driver. If global capital like Berkshire is locking in bets on a US housing turnaround, it’s worth watching for parallels here. However, caution is wise. Rising interest rates or a deeper credit squeeze locally could delay any housing recovery, leaving these stocks under pressure longer. this is just our opinion and not financial advice
Watch South African banks with strong mortgage books like Nedbank and Standard Bank; consider adding if housing credit conditions improve. Avoid homebuilders and retailers tied tightly to the property cycle for now until there’s clearer local evidence of recovery.
- Nedbank
- Standard Bank
- USD/ZAR
- Further interest rate hikes delaying housing demand
- Local economic slowdown reducing credit growth
6/10
Berkshire Hathaway increased its stake in homebuilder Lennar to $2.2 billion (11%) in late September, adding $53.9 million in shares despite the housing market's struggles and high mortgage rates. The move exemplifies Berkshire's strategy of buying undervalued companies during downturns. Lennar stock is down 20% in 2026 and 36% over 52 weeks, with most analysts rating it a hold or sell. Berkshire also acquired Taylor Morrison for $6.8 billion in July, betting on an eventual housing industry rebound.
Our take is based on reporting first published by The Motley Fool.