Buffett Bets Big on VeriSign Again as Stocks Soar in Post-Investment Surge
2min read Warren Buffett, the legendary investor, has once again captured market attention with his recent investment activity. According to filings with the U.S. Securities and Exchange Commission, Buffett’s Berkshire Hathaway has further increased its stake in internet infrastructure company VeriSign. Between December 31, 2024, and January 3, 2025, Berkshire acquired approximately 20,044 shares of VeriSign for around $4.1 million. This marks the third time Berkshire has increased its holdings in VeriSign since December 2024, bringing its ownership to nearly 14% of the company’s outstanding shares, valued at over $2.7 billion.
This latest move comes amid a notable uptick in VeriSign's stock price, which has risen by about 7.6% in just ten trading days following the disclosure of Berkshire’s increased investment. The market's positive reaction underscores the influence of Buffett’s investment decisions, with VeriSign becoming a focal point for investors seeking insights into his strategies.
Berkshire first invested in VeriSign in 2013 and has maintained a stable holding over the years. However, the recent frequency and scale of purchases indicate a renewed confidence in VeriSign’s growth prospects. Notably, between December 17 and December 19, Berkshire bought approximately 234,000 shares for $45.4 million, followed by an additional 143,400 shares at a cost of $28.5 million between December 20 and December 24. These strategic acquisitions reflect Buffett’s strong faith in the company's future.
VeriSign is a leader in the internet infrastructure sector, recognized for its substantial profit margins. In the third quarter of 2024, the company reported a gross margin of 88.02%, ranking it 11th among S&P 500 companies, with an operating margin of 71.25% and a net profit margin of 51.54%. Such impressive metrics provide a compelling rationale for Buffett’s interest in the firm.
Despite a modest 0.49% increase in VeriSign’s stock price for 2024, compared to a 23% rise for the S&P 500 index, investor optimism remains unshaken. Institutions like Citigroup have raised their price target for VeriSign from $210 to $238 while maintaining a buy rating, and Baird Equity Research upgraded its rating to "outperform." These endorsements reflect a solid investor confidence base.
Buffett’s recent investing strategy aligns with a conservative approach, characterized by selling high-value stocks and bolstering cash reserves. According to Berkshire’s 2024 third-quarter report, the company reduced its holdings in Apple, Bank of America, and others, while investing in companies like Domino's Pizza and Pool Corporation. This consistent assessment of undervalued quality stocks indicates adherence to his well-known value investing principles.
As markets navigate uncertain terrains, Buffett's moves serve as critical indicators for market participants. Former Chief Economist Li Daxiao noted Buffett’s ability to influence thousands of investors worldwide, particularly as U.S. stock markets hover near historic highs. His strategy of selling overvalued stocks and investing in undervalued ones reiterates his commitment to stable, long-term value investing—potentially guiding investors in portfolio adjustments.
While Buffett's increased stake in VeriSign signals strong confidence in the company's future trajectory, investors are reminded to exercise caution. Market volatility and company-specific risks remain considerations, underscoring the necessity of informed and diversified investment strategies tailored to individual risk tolerance levels.
