Berkshire lifts its Lennar stake to 11.2%; 97% of this week's buying came on one day, at $81.59

Berkshire Hathaway kept buying Lennar this week, taking its stake in the homebuilder to 11.2%, CNBC reported. A Form 4 filed Wednesday shows purchases on September 28, 29 and 30, bringing Berkshire's holdings to 26,034,436 Class A shares and 553,000 Class B shares.

CNBC's read is that the pace is slowing: about $58 million a calendar day from September 17 to 25, against just under $18 million a day this week through Wednesday. The filing itself shows a more specific pattern.

What the filing actually shows

Monday and Tuesday were token purchases. Wednesday accounted for about 97% of the week's Class A shares. Lennar traded 5.39 million shares that day, according to Nasdaq data, so Berkshire's reported purchases equalled roughly 12% of the session's volume. No new filing had appeared as of Friday night, CNBC said, which suggests no buying on Thursday, when Lennar closed at $82.11.

The number behind the number: what Berkshire paid

Adding up every Class A entry in the three Form 4s since Berkshire crossed 10%, it bought 4,983,835 shares for about $395.0 million, an average of $79.25. It also bought 99,804 Class B shares for about $7.7 million. Together that is roughly $403 million since September 17, our arithmetic from the filings.

The average price climbed each week: about $77.46 for September 17 to 21, $81.22 for September 23 to 25, and $81.60 this week. Lennar closed Friday at $79.81, down 2.8% on the day. At that price, this week's Class A purchase is about $1.2 million below cost, while the whole run since September 17 is about $2.8 million above it. In a $2.1 billion position, both are rounding errors; the point is that Berkshire is no longer buying at the lows it caught on September 18, when it paid an average of $76.39 for 1.2 million shares.

Because Berkshire owns more than 10%, every trade must now be reported within two business days. Any Friday purchase would show up by Monday's deadline.

The other side of the trade

Morgan Stanley started coverage of Lennar on Thursday at underweight with a $65 price target, CNBC reported, about 19% below Friday's close. The backdrop is rates. Freddie Mac's 30-year mortgage average rose to 7.28% on October 1, according to its weekly survey, and the Mortgage Bankers Association's measure has risen six weeks in a row to 7.30%, per CNBC.

That is what Berkshire is buying through: a builder whose buyers face the highest borrowing costs since 2023. A builder's sales pace also flows straight to the local framing, roofing, plumbing and electrical firms it hires.

141,913 independent construction and contractors are listed on CheckThisBiz, a directory of 7,704,724 independent US businesses, including 12,896 in TX, 12,642 in CA, 11,414 in FL. Chains and franchises are excluded from that count, so these are the owner-operated businesses that actually apply for funding.

We covered Berkshire's first crossing of 10% here, and the rate backdrop in our story on Friday's yield jump.

Sources: SEC EDGAR (Berkshire Hathaway Form 4 filings on Lennar), CNBC, Nasdaq market data, Freddie Mac. Calculations are ours. This is market information, not investment advice.