MITSF - Why Buffett And Berkshire Hathaway Are Buying More Mitsui & Co.

2025-03-18 09:33:25 ET

Summary

• Berkshire Hathaway recently increased its stake in Mitsui & Co. as shares traded down to where they were during the August 2024 flash crash.
• Despite commodity price challenges, Mitsui's investments in iron ore and LNG, along with modest earnings growth, make it an attractive long-term investment.
• My forecast for Mitsui's FY 2026 profit shows 5.1% growth, driven by higher volumes in iron ore and LNG, higher LNG prices, and reduced pension plan costs.
• Following impairments in a renewable energy investment, Mitsui might consider pivoting back to core commodities like iron ore and natural gas in the next 3-year plan.

Bucking Berkshire's Selling Trend

Mitsui & Co. ( OTCPK:MITSY )( OTCPK:MITSF ) is one of the five large Japanese trading companies which first caught the attention of Warren Buffett in July 2019 when Berkshire Hathaway ( BRK.A ) ( BRK.B ) started a position in all five, with the intent to purchase up to a 10% stake in each. Berkshire has been a huge net seller of stocks in general since the start of 2024 and has even stopped buying back its own shares for now. The Japanese trading companies have been an exception to this trend, as recent filings have shown further purchases. Mitsui was specifically called out for the change in ownership stake to 9.82% from 8.09% previously. This brings the value of Berkshire's Mitsui stake to around $5.5 billion and the stake in all five companies to around $25 billion total. Buffett discusses his rationale for owning these companies in the latest annual letter , a notable mention as he rarely goes into detail about stock purchases anymore. ...

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