Warren Buffett’s Berkshire Hathaway more than tripled its bet on Ally Financial in the second quarter, giving the conglomerate a nearly 10% stake in the unconfirmed auto and home loan company. USA. Berkshire increased its Ally holdings to about 30 million shares and was worth more than $1 billion at the end of June, according to a regulatory filing. The group now has a 9.6% stake in the company, making it the second-largest shareholder after index giant BlackRock, according to InsiderScore. Ally Financial has greatly benefited from the surge in consumer demand for new and used cars during the pandemic, leading to a share price increase of more than 50% between 2020 and 2021. Stocks have fallen more than 20% this year as the auto market begins to stabilize and higher interest rates have dampened consumer appetite. However, Ally’s drop in 2022 makes the stock cheap relative to its peers, which could attract the legendary value investor. The stock is currently trading at just 1.0 times tangible book value, according to Piper Sandler analyst Kevin Barker. The group bought just under 9 million shares of Ally for the first time, and the Omaha-based giant added significantly to its holdings in the quarter after shares fell more than 20%. Buying is a classic move for Buffett, who explained his thinking during this year’s annual shareholder meeting. Buffett said in Omaha in April: “We’re not good at timing. “We always hope it goes down in price for a while so we can buy more.” Berkshire has been net buying stocks for three consecutive quarters, according to regulatory filings. The company also increased its Apple stock holdings and increased its bets on Occidental and Chevron. Bill Stone, CEO of Glenview Trust Company and a Berkshire shareholder, said: “Buffett has stayed true to his word as every stock that has grown in holdings this quarter has been a new addition in the year. previous quarter or have more shares purchased in the first quarter.” Strong demand Some analysts believe demand for auto loans remains strong, which provides a headwind for Ally. JPMorgan analyst Kabir Caprihan pointed out that the company generated $13.3 billion in Q2, its highest quarterly figure since 2006. “Consumer demand,” Caprihan said. The use of auto loans remains strong, and the rising exchange rate environment and supply chain challenges are expected to favor net interest income growth,” Caprihan said in a statement. note. The stock is also generally favored by Wall Street analysts, with more than three-quarters of Ally’s supporters rating it as a buy. Ally was founded in 1919 by General Motors, formerly known as General Motors Acceptance Corporation (GMAC), to provide financing to automotive customers. Ally remained the automotive sponsorship arm of GM until 2010 when the company was spun off and eventually rebranded. Although Berkshire’s stake in Ally is now just under 10%, it’s not hard for some to see that its auto loan business can go hand in hand with the group’s core insurance business like how. Berkshire owns auto insurance giant Geico. Late last year, Ally bought credit card company Fair Square Financial for $750 million, looking to expand its reach. — Michael Bloom of CNBC contributed reporting.