Warren Buffett's Berkshire Hathaway Bought Shares of The New York Times. Should You?

Famed investor Warren Buffett's Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) didn't do much buying in Q4, the company revealed on Tuesday when it released its latest 13-F filing. In fact, it did more selling than buying. But there was one interesting, entirely new position. During the quarter, Berkshire established a position in The New York Times (NYSE: NYT). While the position is small for Berkshire, accounting for only about 0.1% of its overall portfolio, it's meaningful for The New York Times.

After buying nearly 5.1 million shares of The New York Times Co. during the quarter, the stake is now valued at more than $350 million, representing approximately a 3% stake in the company, which commands a market capitalization of more than $12 billion.

While the small size of the new position suggests it likely wasn't a move by Warren Buffett himself during his last quarter as CEO, it could have been one of his investment lieutenants -- either Todd Combs, who left Berkshire in December amid a broader restructuring of Berkshire's leadership team, or Ted Weschler.

Whatever the case, the new investment is interesting, and it prompts the question: Should investors follow Berkshire's footsteps and buy shares of The New York Times Co.?

Image source: Getty Images.

Strong business momentum

Looking at The New York Times' financials, you can see why Berkshire was attracted to the company. It's firing on all cylinders. The company's digital-only subscription revenue in Q4 rose 13.9% year over year, and its digital advertising revenue climbed 24.9%. The company's total revenue rose 10.4% year over year to $802 million.

Also worth calling out, The New York Times' adjusted earnings per share rose 11.2% year over year to $0.89.

Looking to the start of 2026, The New York Times expects its business momentum to continue. The company guided for digital-only subscription revenue to increase 14% to 17% year over year in Q1, and digital advertising revenue to increase at a rate in the high teens to low twenties. For total advertising revenue, management expects a year-over-year growth rate in the low double digits.

Is this a good time to buy The New York Times stock?

With The New York Times' business clearly doing well, is this a good time to follow Warren Buffett's Berkshire Hathaway into the stock?

Two long-term catalysts for The New York Times that I can think of that the Berkshire executive responsible for the purchase may have had in mind when the purchase was made may have been the company's reputation as a trusted source as AI (artificial intelligence) content becomes more prevalent, and the company's growing emphasis on video as a news channel it wants to become more prominent in.

"As we've discussed, video in particular remains an important area of strategic investment being reflected in our guidance," explained The New York Times' chief financial officer, Will Bardeen, during the company's fourth-quarter earnings call. "We are confident in our ability to generate strong returns as we grow the amount and impact of video journalism in news and across our portfolio."

With all of this said, it's worth noting that Berkshire may have initiated its stake in The New York Times at a much lower price. There were parts of Q4 in which the stock traded in the fifties. Shares are up more than 35% from those levels.

Overall, with the stock trading at about 35 times earnings and 28 times analysts' consensus forecast for The New York Times' earnings over the next 12 months, the stock doesn't look extremely expensive, but it doesn't look very attractive either. A better move for investors than buying may be to add the stock to their watchlists and see if shares offer a better entry point in the future.

Daniel Sparks and his clients have positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway and The New York Times Co. The Motley Fool has a disclosure policy.