Warren Buffett, the legendary investor, has disclosed significant stock sales by Berkshire Hathaway Inc. BRK BRK in the second quarter, including a substantial reduction in its Apple Inc. AAPL holdings.
What Happened: Buffett’s company sold over 389 million Apple shares in the second quarter, according to the company’s latest U.S. Securities and Exchange Commission filing on Wednesday. Despite the sale, Berkshire Hathaway still holds 400 million Apple shares.
The news that Buffett had sold a significant portion of Apple shares was revealed in Berkshire’s earnings report earlier this month, but the precise number of shares sold only became clear on Wednesday.
Besides Apple, Berkshire Hathaway also trimmed its investments in Bank of America Corp BAC. Chevron Corporation CVX, Capital One Financial Corp. COF, Floor & Decor Holdings Inc FND, T-Mobile US, Inc. TMUS, and Louisiana-Pacific Corporation LPX.
The company has boosted its holdings in Chubb Limited CB to 27,033,784 shares and Occidental Petroleum Corporation OXY to 255,281,524 shares. Additionally, it has made new, smaller investments in aerospace parts manufacturer Heico Corp HEI with 1,044,242 shares and cosmetics retailer Ulta Beauty Inc ULTA with 690,106 shares.
Tesla Inc.‘s CEO Elon Musk commented on Berkshire Hathaway’s substantial $277 billion cash reserves, predicting changes as T-bill returns decline following the revelation of the conglomerate’s stake sales. Musk said, “$277B cash reserves is wild. That will change as the T-bill return drops.”
Why It Matters: Buffett’s investment decisions have always been closely watched due to his remarkable track record. This recent move comes at a time when Berkshire Hathaway’s stock is up over 20% year-to-date, despite trailing the broader stock markets for much of the year due to its large holding in Apple.
Earlier in August, Buffett’s decision to sell nearly half of Berkshire’s Apple stock was seen by Elon Musk as an indication of an impending market correction.
Global market volatility has also tested Buffett’s investments. Despite a significant initial plunge, Berkshire’s $20 billion investment in Japanese trading giants recovered most of its losses. The global market turmoil triggered by Japan’s rate hike had a limited impact on these investments.
Buffett’s recent stock sales have also contributed to Berkshire’s cash reserves swelling to a record $277 billion. This increase in cash reserves comes despite a 15.5% year-over-year fall in the company’s second-quarter net earnings, largely due to a decline in investment gains amid volatile market conditions.
Price Action: Berkshire Hathaway Inc.’s Class A stock closed at $657,122.00 on Wednesday, marking a gain of 1.24%. Year-to-date, it has risen by 19.52%. Meanwhile, Berkshire Hathaway Inc.’s Class B stock finished at $438.47 on the same day, up by 1.40%. In after-hours trading, it increased 0.14%. Year-to-date, the stock has appreciated 20.97%, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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