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Buffett adds Organon, Price Target Upped

Berkshire Hathaway (BRK.B) added a $50 million stake in Organon (OGN) from the spinoff from its holding in Merck (MRK). Berkshire has been a net seller of stocks in 2021, including in the second quarter, notes George Fisher, editor, Guiding Mast Investments newsletter.

“The stock sales suggest that Buffett and his investment managers Todd Combs and Ted Weschler could be wary of valuations as stocks regularly set new highs. Of interest is that BRK.B has been a net seller of healthcare stocks but has retained the spinoff interest – so far. Keep this one on your radar screen for possible future OGN actions by the Berkshire team.

Citi raised their price target on Organon to $43 from $35 and keeps a Buy rating on the shares following the Q2 earnings report. Citi views the print and inaugural dividend positively, "especially in light of investors' concerns ahead of Organon's first earnings as a stand-alone company." Citi believes OGN "strikes a good balance" between operational growth, dividend, and free cash flow.”

Editor’s Note: Guiding Mast Investments, edited by George Fisher, offers both a monthly newsletter and multi-part financial and portfolio education training with the advantage of personal communication. Topics include Assessing Personal Risk, Asset Classification and Diversification, Equity Research, Value Fundamentals, and Portfolio Implementation. For more information visit www.GuidingMastInvestments.com.

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