Warren Buffett famously moves markets with his investment decisions. The so-called “Oracle of Omaha” showcased his clout when he revealed new stakes in Kroger and Biogen on Friday, spurring investors to add $2.5 billion to the pair’s combined market capitalization in after-hours trading.
Buffett’s Berkshire Hathaway conglomerate shelled out $549 million for a 2.4% stake in US supermarket giant Kroger in the fourth quarter of 2019, SEC filings show. It also paid $192 million for a 0.4% stake in Biogen, a biopharmaceuticals titan that develops and delivers therapies for neurological diseases.
News of Buffett’s backing drove Kroger’s stock up about 6% in after-hours trading on Friday, boosting its market cap by over $1.3 billion to nearly $24 billion. It also drove Biogen stock up 2%, lifting its market cap by more than $1.2 billion to north of $59 billion.
The billionaire investor’s new bets seem to be paying off, even excluding the impact of his stamp of approval. Kroger’s stock rose about 10% between October 1 and the close of trading on Friday — before Buffett revealed his stake. Biogen’s stock rocketed 47% over the same period.
The stock rallies reflect progress at both companies. Kroger is realizing gains from its sweeping “Restock Kroger” initiative, which involves remodeling stores, optimizing processes, investing in digital offerings, and partnering with the likes of Microsoft and Ocado.
Meanwhile, stronger sales of Biogen’s treatments for multiple sclerosis and spinal muscular atrophy boosted the company’s revenue by 7% and its net income by 33% in 2019.