Berkshire Hathaway buys another $192.6 million of Lennar, lifting its stake to roughly 12%

Berkshire Hathaway bought 2,403,609 Class A shares and 15,028 Class B shares of LEN on October 1 and 2 for about $192.6 million, according to a Form 4 filed with the SEC on October 5. The weighted-average purchase prices ranged from $78.37 to $81.90 for the Class A stock and from $77.12 to $80.00 for the Class B stock. After the trades, BRK.B holds 28,438,045 Class A and 568,028 Class B shares.

The buying extends a steady accumulation. Berkshire crossed the 10% ownership threshold in mid-September, which triggered the Form 4 reporting, and bought almost $349 million of Lennar stock between September 17 and September 25. Before the latest purchases it held about 11% of the company, narrowly behind Vanguard's 11.2%, and the new shares lift it to roughly 12% of Lennar's combined Class A and B stock.

Berkshire is adding to Lennar while the stock is out of favor: shares are down about 40% over the past year and recently traded near a 52-week low of $73.75, and Morgan Stanley started coverage at Underweight with a $65 price target. The stake sits alongside Berkshire's own homebuilding operations; after acquiring Taylor Morrison this summer, Berkshire ranks as the fourth-largest U.S. homebuilder, a ranking based on the businesses it owns rather than its Lennar shares, according to The Motley Fool.

What to watch: further Form 4 filings showing whether Berkshire keeps buying, and Lennar's next quarterly report for signs that housing demand and margins are stabilizing.