Warren Buffett Buys Tesco Shares

Warren Buffett Likes Tesco

Tesco is the UK's biggest retailer with around 30% of the market, but surprisingly it has just had its worst Christmas for decades. As a result the share price slumped 19% on January 12. This raised eyebrows, as many people thought the fall was overdone. One of those who sniffed a bargain was billionaire long-term stocks investor Warren Buffett. Many people watch Warren Buffett's stocks and shares dealings very closely and indulge in what is referred to as coat-tailing i.e. buying what Buffett buys.

Tesco 10 Year Chart with 200 day moving average


Tesco 1 Year Chart with 50 and 200 day moving averages

After the shock announcement from Tesco, Mr Buffett decided to invest a further 480 million UKP in the company (750 million USD), increasing his stake from 3.21% to 5.08%. He made the move on January 13 the day after Tesco's anouncement.

Mr Buffett is of course a long-term investor and is notorious for not trying to time the market, so there is nothing to say that Tesco won't fall further, but if it does then it is quite possible that Mr Buffett will merely buy some more. He loves stable companies that make a profit and pay dividends. He also likes to hang on to his buys for a very long-time.

Some of the directors of Tesco have also been buying. Ken Hydon, Non Executive Director, bought 30,000 shares on 18 January at 320p per share. The Director now holds 60,093 shares representing 0.00% of the shares in issue.

Richard Broadbent, Chairman, bought 30,149 shares on 12 January at 330p.

Not big buys but better than nothing.

Personally I am waiting off to see if the price will fall back even further to around 270p :-)