The conglomerate led by Warren Buffett has made some major moves during the second quarter.
Berkshire Hathaway (NYSE:BRK.A and NYSE:BRK.B), a conglomerate led by Warren Buffett that has surpassed earnings estimates for its second fiscal quarter, has made major changes to its $285 billion portfolio of stocks.
The biggest move Berkshire Hathaway made last quarter was selling a large chunk of its Apple (NASDAQ:AAPL) stake. Apple is still Berkshire Hathaway’s largest holding. It accounts for 29% of its portfolio.
Berkshire Hathaway’s earnings also exceeded estimates for the quarter. The company generated $93.6 billion in revenues, an increase of 1.2% over last year. This exceeded estimates of $91.1billion. Its adjusted earnings per share came in at $5.38, easily beating estimates of $4.61.
The stock of Berkshire Hathaway was down by more than 3% for the day. This was due to a massive selling off that saw the Dow Jones Industrial Average fall more than 1,000 points or 2.7%. The Nasdaq fell 655 points or 3.9% and the SEP 500 dropped 174 points or 3.2%.
Selling Apple
Selling Apple
Apple has been Buffett’s biggest holding for many years, but today its position is smaller than it was when the year began. Berkshire Hathaway will hold Apple stock for 49% of its total portfolio by 2023. That’s $174 billion out of the $353 billion.
Buffett reduced his Apple stake by 13% in the first quarter to $135 billion. However, it still accounted for around 40% of his portfolio.
The company sold another $50 billion of Apple stock in the second quarter. It now owns around $84 billion worth of the iPhone maker’s stocks, which is about 29%. Since the start of the year, more than half of the company’s stake in Apple has been sold. Apple stock was down by 5% for the day.
The company doesn’t usually elaborate on its moves. However, you can learn more later this month, when it files its 13F with the SEC. This form details the company’s quarterly portfolio moves.
Buffett did not buy another stock after selling Apple. The portfolio has dropped to $285 billion from $331 billion by the end of Q1. Buffett has a record amount of cash sitting on the sidelines – $277 billion. This is a record for his company. Berkshire Hathaway now has almost as much cash on the sidelines as it does in stocks.
The majority of the cash, approximately $234 billion, is in Treasury Bills, up from $129 million at the end 2023.
This could indicate that Buffett anticipated the recent correction and the overheated markets. Buffett and his team, who have so much invested in Treasury bills for their safety, are happy to earn the 5% returns that Treasury bills pay out.
Dumping Bank of America too
Dumping Bank of America too
Bank of America (NYSE BAC) is Berkshire Hathaway’s second largest investment, with $41 Billion invested in the bank’s stock as of June 30 or 14% of its portfolio. Buffett has also been selling Bank of America this quarter.
According to SEC filings, Buffett sold approximately 38 million shares of Bank of America last week and another 18 million shares earlier this month.
The company was probably taking profits, as the bank’s stock had risen by about 25% in July before the market began to tank in recent weeks.
Keep a steady hand on the wheel
Keep a steady hand on the wheel
Even after Monday’s stock sell-off, Berkshire Hathaway is still up 16% for the year. Buffett has built Berkshire Hathaway to be able to weather volatile markets. Investors can expect him to steer the company through this turmoil.
The earnings of the companies owned by Berkshire Hathaway were up 16%, to $11.6 billion. Warren Buffett’s team focuses on companies that are well-managed and efficient. They also look for companies with a wide range of industries. These qualities allow the private holdings portfolio to navigate the ups and downs of the market.
Berkshire Hathaway stock is a great addition to your portfolio, especially now.
This site is intended for entertainment only and does NOT offer financial advice.
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