Berkshire Hathaway Inc (BRK.B)

[bar1080]

Yet Another BRK ATH: $453

[Prudent Capitalist]

I suspect BRK is only selling down BAC to get below the 10% ownership threshold for reporting purposes, etc.

[DiscoverGold]

Warren Buffett and Berkshire Hathaway $BRK.B filed for its sale of another ~14M shares of Bank of America $BAC for ~$550.7 Million (Pre Tax)
By: Evan | August 20, 2024

• THE BUFFETT CASH PILE CONTINUES TO GROW

Warren Buffett and Berkshire Hathaway $BRK.B filed for its sale of another ~14M shares of Bank of America $BAC for ~$550.7 Million (Pre Tax)

Berkshire has now sold more than $4 Billion worth of Bank of America since the end of Q2



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[gfp927z]

The real reason Buffett loves OXY -

--> 'Carbon Capture and Storage (CCS) will grow into a $4 trillion market by 2050' (per Exxon) -



>>> What Is Carbon Capture and Storage?


Motley Fool

By Matthew DiLallo

May 23, 2024


https://www.fool.com/terms/c/carbon-capture-and-storage/?utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article&referring_guid=7e55019b-8b30-4cb6-ab10-9be59d85310d


Key Points

Carbon capture and storage captures carbon dioxide emissions for permanent storage or usage.

CCS could play a vital role in reducing global emissions.

The technology could prove to be very lucrative for oil companies.

Carbon capture and storage, or CCS, is a process that captures carbon dioxide gas emissions and safely sequesters them underground. It helps reduce carbon emissions that are harmful to the environment and contribute to climate change. Companies and governments are investing heavily in CCS to make the technology commercially viable so it can contribute to a lower-carbon world.

Understanding carbon capture and storage

Carbon capture and storage is a three-step process:

Carbon dioxide emissions are captured from a source, such as a chemical or steel plant, or directly from the atmosphere.

The captured carbon dioxide gas is transported by pipeline to a sequestration or utilization site.

The carbon dioxide is either injected into a deep underground formation for permanent storage or utilized to produce oil or a higher-value product.

CCS helps reduce carbon emissions by capturing them from the source or the atmosphere. The greenhouse gas is then permanently stored or utilized so that it doesn't cause additional harm to the environment.

What are the types of carbon capture and storage?

There are two main types of CCS technology: point-source capture and direct air capture (DAC).

Point-source capture involves installing carbon capture technology at the emissions source to capture and separate carbon dioxide from flue gas. The pure stream of carbon dioxide gas will then flow through a pipeline to a sequestration or utilization site.

A DAC system is a purpose-built facility that extracts carbon dioxide from the atmosphere. DAC technology uses an engineered mechanical system that pulls in air and extracts carbon dioxide through a series of chemical reactions.

In many ways, DAC is similar to what plants and trees do in photosynthesis, though at a faster pace and with a smaller physical footprint. However, it's a more expensive process than a point-source capture system because carbon dioxide in the air is much more diluted than flue gas from an industrial plant.

Once captured, carbon dioxide flows through pipelines to sequestration or utilization sites. Carbon dioxide is commonly used in enhanced oil recovery (EOR), where oil companies inject carbon dioxide into a legacy oil reservoir to increase pressure and raise production rates.

The process stores the carbon dioxide while boosting oil production. Captured carbon dioxide can also be permanently sequestered in a non-oil-producing underground formation or utilized for industrial applications.

Why carbon capture and storage is important

The Intergovernmental Panel on Climate Change has highlighted the role that CCS could play in reducing carbon emissions and their impact on global warming. The world is investing heavily in renewable energy sources, like wind and solar energy, to help reduce the need for carbon-based fuels.

However, countries will also need to deploy technologies that remove carbon dioxide from the atmosphere to help reduce the impact of hard-to-abate heavy industries, such as steel, cement, chemicals, and other industrial manufacturing.

Energy companies believe CCS can provide them with a dual benefit. They believe it could extend the life of fossil fuels usage while also becoming a very lucrative global market. Oil giant ExxonMobil estimates CCS will grow into a $4 trillion market by 2050. That's about 60% of the global market it sees for oil and gas by that time.

Many energy companies are investing heavily in CCS technologies. For example, Occidental Petroleum has a long history of using carbon dioxide in EOR. It's leveraging that expertise to become an emerging leader in CCS.

The company is building the world's largest DAC site in Texas. It was also an early investor in DAC technology company Carbon Engineering, which it acquired in 2023 for $1.1 billion.

The STRATOS facility will be able to capture 500,000 tonnes of carbon dioxide per year when it comes online in 2025. Occidental is working to commercialize the project by selling carbon credits to companies seeking to achieve their emission-reduction targets.

STRATOS is one of many DAC projects the company hopes to develop. It also plans to license its DAC technology. Occidental believes it could eventually make as much money from CCS as it currently does from its oil and gas production business.

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[Prudent Capitalist]

Probably a Todd or Ted selection, but it appears to be great timing with Ulta being seriously undervalued during the term of the purchase. but, as you state, too small of a position to move the needle much for BRK.

[DiscoverGold]

Here's what Warren Buffett portfolio looked like as of the end of Q2:
By: Evan | August 14, 2024

• Many famous investors including Warren Buffett, Bill Ackman and a bunch more just updated their portfolios

Here's what their portfolios looked like as of the end of Q2

Warren Buffett:



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[gfp927z]

Bar, >> Ulta, Heico <<

I figure these were Weschler or Combs picks, but the news still sent ULTA up 14% and Heico up 4% in after hours trading. I have some Heico in my portfolio, so nice to see it get the Berkshire 'stamp of approval' :o) Also have some Chubb and Oxy.

Fwiw, some stocks that Buffett has reduced or sold entirely I decided to keep, along with some of his stalwarts like Coca Cola -

Chubb
Coca Cola
Costco (Munger)
Heico
Marsh & McClennan
McDonalds
Microsoft
Moody's
Occidental
Procter & Gamble


Full Portfolio List - https://investorshub.advfn.com/Portfolio-Ideas-40985



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[bar1080]

That Ulta buy was a surprise. But a very tiny position.

[gfp927z]

>>> Berkshire Buys Ulta Beauty and Heico Stock, Sells Snowflake in Second Quarter


Barron's

by Andrew Bary

Aug 14, 2024


https://www.barrons.com/articles/berkshire-buffett-ulta-beauty-snowflake-chubb-13f-stocks-9f755841?siteid=yhoof2


Berkshire Hathaway bought small stakes in Heico (HEI) and Ulta Beauty (ULTA) in the second quarter, while adding to its holding in Chubb (CB), according to the company’s quarterly 13-F filing released Wednesday after the market closed.

Berkshire eliminated its holding of 6.1 million shares of Snowflake (SNOW), the software company, which it bought at the time of the company’s initial public offering in 2020. That holding was worth about $1.2 billion at the end of March.

Berkshire bought 690,000 shares of Ulta Beauty that were worth $266 million at the end of the second quarter and just over a million shares of Heico, a supplier to the aerospace industry. That stake was worth $185 million on June 30.

Berkshire also bought about a million shares of insurer Chubb. It held 27 million shares worth $6.9 billion on June 30.

Berkshire trimmed its stake in Capital One Financial by about 2.6 million shares to 9.8 million shares in the second quarter.

Berkshire was a light buyer of stocks in the second quarter, purchasing less than $2 billion, while selling about $77 billion, mostly Apple

That stake fell nearly 50% to 400 million shares and was reported in Berkshire’s recently released 10-Q report for the second quarter.

Ulta Beauty stock was higher in after-hours trading, rising 13% to $371.70. The stock was down about 33% in 2024 as of the close of trading Wednesday and Berkshire appears to have taken advantage of that weakness.

Berkshire CEO Warren Buffett oversees the company’s equity portfolio of more than $300 billion, but he delegates authority over about 10% of it to investment managers Todd Combs and Ted Weschler. They operate independently of Buffett.

The new holdings in Heico and Ulta Beauty could be investments by Combs or Weschler given their small size. Buffett tends to accumulate holdings of at least $3 billion in order to move the needle given the large size of the Berkshire portfolio and Berkshire’s market capitalization of $940 billion.

The Snowflake holding is believed to have been initiated by Combs. At the time of the Snowflake IPO in 2020, the company’s CEO Frank Slootman said most of his Berkshire interactions had been with Combs.

The Snowflake investment likely wasn’t particularly profitable for Berkshire—a demonstration of the dangers of buying richly priced IPOs. Snowflake went public in late 2020 at $120 and its stock price averaged about $150 a share in the second quarter. The stock is below that level now, trading down 1.5% to $125.41 in after-hours action on Wednesday.

Berkshire eliminated its holding in Paramount Global in the second quarter—a move that Buffett telegraphed at his company’s annual meeting in May.

The company reduced its sizable holding in Chevron by four million shares to about 119 million shares that were worth $18.6 billion on June 30. That move was disclosed in the 10-Q.

Berkshire also bought about 92 million shares of Sirius XM Holdings, the satellite radio company, in the second quarter. It held 133 million shares on June 30, a stake that is now worth about $400 million. Berkshire also is the largest shareholder of Liberty Sirius XM Holdings, a tracking stock for Sirius XM, with a stake of about 30%. The two companies are due to merge in September.

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[DiscoverGold]

Berkshire Hathaway Earnings: Strong Insurance Results Continue to Lift Revenue and Profitability
By: Morningstar | August 5, 2024

• Record cash on hand as Buffett slashes Apple stock position.

Wide-moat-rated Berkshire Hathaway BRK.A/BRK.B reported adjusted, second-quarter operating results that were more or less in line with our expectations. We are leaving our $640,000 per Class A and $427 per Class B share fair value estimates in place.

Second-quarter (first-half) revenue, including unrealized and realized gains/losses from Berkshire’s investment portfolios, decreased to $117.5 billion ($209.3 billion) from $125.6 billion ($245.7 billion) in the year-ago period(s) as the company lapped significant unrealized and realized investment gains during the first half of 2023. Excluding the impact of investment gains/losses and other adjustments, second-quarter operating revenue increased 1.2%, and first-half OR increased 3.2% year over year to $93.7 billion ($183.5 billion).

Operating earnings, exclusive of investment gains/losses, increased 15.5% (26.0%) year over year to $11.6 billion ($22.8 billion) during the June quarter (first half of the year), with strong insurance results continuing to compensate for weakness in other segments. When including the impact of the investment gains/losses, reported operating earnings decreased to $30.3 billion ($43.1 billion) from $35.9 billion ($71.4 billion) in the prior year’s period(s).

Book value per share, which still serves as a decent proxy for measuring changes in Berkshire’s intrinsic value, increased 4.5% sequentially and 11.4% year over year to $415,668 (from $397,627 and $372,966 at the end of March 2024 and June 2023, respectively).

Record Cash on Hand As Berkshire Slashes Apple Stock

Of note was the fact that Berkshire sold off close to half of its Apple AAPL stake and invested the proceeds in US Treasury Bills.

The company closed out the second quarter with a record $276.9 billion in cash and cash equivalents, up from $189.0 billion at the end of March 2024. Free cash flow reached $9.1 billion in the second quarter, and Berkshire also sold on a net basis $75.5 billion of its stock holdings (primarily Apple, from what we can tell) in an apparent derisking move (noting that Apple’s shares ran up 23% during the second quarter).

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>>> What Buffett's huge Apple sale really means


The Street

by Charley Blaine

Aug 4, 2024


https://finance.yahoo.com/news/buffetts-huge-apple-sale-really-215832027.html


When Berkshire Hathaway (BRK.B) announced its earnings on Saturday, much was made of a note deep in its detailed filing.

Berkshire has been selling lots of shares of Apple (AAPL) , and the value of its investment had fallen from $174.3 billion on December 31 and $135 billion at the end of the first quarter to $84.2 billion as of June 30. From December to June, that's a decline of about 50%.

Berkshire owned 915.6 million shares of Apple as of Jan. 2, according to Apple's proxy statement. The share count is probably now about 450 million shares, worth around $88 billion as of Friday.

At the company's annual meeting in May, Chairman Warren Buffett had told shareholders that Berkshire was trimming its Apple stake, largely because its investment in the tech giant had done so well it had huge capital gains. Other than that, he said at the time, he loves what Apple does.

(Buffett started investing in Apple in 2016, a late-comer to the tech party. The late Charlie Munger, Buffett's long-time partner, talked Buffett into investing in Apple, telling the Oracle of Omaha it was more a consumer stock than a tech stock.)

A magnificent stock pick

Selling some shares now may also be simple prudence. Selling now reduces Berkshire's risk to a frothy stock market. Either way, Buffett wasn't complaining about the long-term capital gains tax that might hit — about 20% of the profit. But when you've made so much money from one stock, you can afford the taxes.

How big a gain? From the shares bought between 2016 and 2018, the gain would be over 400%. For shares bought between 2022 and the first quarter of 2023, the last time Berkshire was known to add to its Apple position, the gain would be 20% before taxes.

There is a counter-narrative. Some Apple watchers, plus CNBC's Jim Cramer, think there may also be concern about Apple's big China business. Revenue in products and services in China was off 6.5% from a year ago in Apple's fiscal third quarter and off 10% for the fiscal year-to-date.

The political tensions between China and the United States may be a worry, too.

Apple shares holding their own in market turmoil

Apple investors seem more confident about the company now. The stock was up 23.6% in the second quarter of 2024, after a 10.9% loss in the first quarter. It's up 3.9% in the third quarter.

Moreover, in a week where Amazon.com (AMZN) fell 8%, Microsoft (MSFT) dropped 4%, and Nvidia (NVDA) fell 5.1%, Apple was up 1%. It is up 14.2% this year.

Apple has returned to being the most valuable company in the world with a market capitalization of $3.37 trillion. That is still a bit pricey: Its forward price-earnings ratio is about 30. The Standard & Poor's 500's forward p/e is about 22, down from 22.72 as stocks were peaking.

So, what has Berkshire and Buffett done with the cash realized by these gains? Mostly put them in cash and Treasury bills. An easy source of cash to pay the capital gains taxes — if Berkshire can't find a way to shelter the gains.

More importantly, Buffett and Berkshire are waiting.

Remember, Buffett (and Berkshire Hathaway) is a classic value investor who doesn't chase the hot stock. Buffett and Berkshire look for great companies appropriately priced. (Munger had weaned Buffett off just buying cheap stocks.)

So, like a lot of investors, Buffett and his investment management team are watching the stock market's current volatility to run its course. In other words, looking for good buys at better prices. They have the cash.

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[gfp927z]

Chubb - >>> Berkshire Hathaway Added 26 Million Shares of This Stock in the Past 3 Quarters: Here's Why It's a Smart Buy Today


by Courtney Carlsen

Motley Fool

Aug 3, 2024


https://finance.yahoo.com/news/berkshire-hathaway-added-26-million-222400906.html


Since becoming CEO at Berkshire Hathaway in 1965, Warren Buffett has delivered 19.8% compound annual returns to investors, or enough to turn a $100 investment into $4.4 million today. Buffett's extended track record of success is one reason investors eagerly await the release of Berkshire's quarterly report showing the stocks the conglomerate bought and sold during the quarter.

Over the past three quarters, Berkshire Hathaway has bought shares of Chubb stock hand over fist and kept its buying confidential for two quarters. Berkshire owns 26 million shares of the insurer as of March 31, worth roughly $7.2 billion today. Here's why Chubb is a smart buy for investors today.

Why Buffett is drawn to insurance investments

Buffett loves the insurance industry, going back to his days as a student at Columbia Business School. At the time, Buffett learned under Benjamin Graham, who invested in GEICO in 1948. It was one of the best-performing assets during Graham's career.

When Buffett acquired Berkshire Hathaway in 1965, it was a failing textile company that was barely staying afloat. In 1967, Berkshire acquired the insurer National Indemnity, which Buffett credits as a turning point in Berkshire Hathaway's history.

Insurance companies' cash flows make them appealing investments, which is why Buffett continues to invest heavily in them. A few years ago, Berkshire Hathaway acquired Alleghany for $11.6 billion, adding to its list of insurance companies owned by Berkshire Hathaway, including GEICO, National Indemnity, Berkshire Hathaway Primary Group, and Berkshire Hathaway Reinsurance Group.

Chubb is one of the largest and best at managing risk

Chubb is one of the world's largest property and casualty insurance companies and underwrites various policies, including personal automotive, homeowners, accident and health, agriculture, and reinsurance.

The company has an excellent risk management history, which you can observe by its combined ratio. This essential insurance metric is the sum of claims costs (how much an insurance company pays out on a policy) and expenses (like employee compensation or fixed overhead) divided by the premiums the company collects.

Over the past two decades, Chubb's average combined ratio was 90.8%, well below the industry average of 100%. This matters because it translates into free cash flow, which the company uses to pay dividends, buy back shares, or invest in things like bonds and stocks. Chubb's solid growth is why it has raised its dividend payout for 31 consecutive years.

Another benefit of investing in insurance is the timing of cash flows. Insurers collect premiums upfront and pay out claims down the road. In the time between, the company can invest this money, known as "float," usually in short-term Treasury bills. As policies expire, companies keep their profits and can build an extensive investment portfolio over time.

Chubb has a $113 billion investment portfolio primarily invested in fixed-income securities. Last year, it earned $4.9 billion in investment income, up 32% year over year, and its yield on average invested assets improved from 3.4% to 4.2% as it benefited from rising interest rates. Through the first six months of 2024, Chubb's net investment income has increased another 27% from last year.

Chubb is well positioned

The Federal Reserve is projected to cut interest rates sometime this year and into next, which could negatively impact Chubb's investment portfolio in the short term. However, some longtime market participants think interest rates could stay elevated.

For example, Howard Marks of Oaktree Capital Management has described a "sea change," saying, "For various reasons, the Fed is not going to go back to the ultra-low interest rates over the last 13 years" in a 2023 interview on the Motley Fool Money podcast. If that's the case, insurers like Chubb will benefit by earning more interest income than was possible in the decade and a half prior.

JPMorgan Chase CEO Jamie Dimon also cautioned that "there are still multiple inflationary forces in front of us" due to fiscal deficits, rising interest rates, and stubbornly high inflation. Chubb is already a solid company to own, and if inflationary pressures persist, it has the pricing power to adapt to rising costs, giving it stellar potential for the next decade and beyond.

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[gfp927z]

Apple - >>> Why Warren Buffett’s Berkshire Dumped 55.8% Of Its Apple Stock


Forbes

by Peter Cohan

Aug 3, 2024


https://www.forbes.com/sites/petercohan/2024/08/03/why-warren-buffett-dumped-56-of-berkshires-apple-stock/


Warren Buffett dumped 55.8% of Berkshire Hathaway’s holdings of Apple stock in the first six months of 2024, according to Reuters.

Since the end of 2023 Berkshire has sold 505 million Apple shares — 115 million in the first quarter and another 390 million in the second quarter. As of June 30, that represents a 55.8% reduction in Berkshire’s Apple holdings since the beginning of the year, Reuters noted.

Why did he sell so much Apple stock? Should other investors follow suit?

I do not know why Buffett sold such a huge chunk of Berkshire’s Apple stock. However, Apple’s tepid growth rate and high valuation suggest the famed investor may have concluded the stock’s prospects are not great.

While Apple’s AI offerings could give consumers a reason to upgrade, the iPhone maker’s declining revenues in China, its regulatory woes, and the absence of a compelling growth vector — particularly if Apple Intelligence does not prove to be a killer app — could mean Apple will be lucky to achieve low single digit revenue growth.

I suspect other investors will take a cue from Buffett.

Apple has been a good investment. Since Buffett began buying he iPhone maker’s stock in 2016, Berkshire has spent roughly $40 billion. Apple shares have delivered a total return of nearly 800% since Berkshire first disclosed its stake, noted the Financial Times.

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[DiscoverGold]

Warren Buffett and Berkshire Hathaway $BRK.B filed for its sale of another 18.4M shares of Bank of America $BAC for ~$767 Million (Pre Tax)
By: Evan | July 30, 2024

• Warren Buffett and Berkshire Hathaway $BRK.B filed for its sale of another 18.4M shares of Bank of America $BAC for ~$767 Million (Pre Tax)

Berkshire has now sold more than $3 Billion worth of Bank of America in July.



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[DiscoverGold]

Berkshire Hathaway $BRK.B filed for its sale of another 18.9M shares of Bank of America $BAC for ~$802.5 Million (Pre Tax)
By: Evan | July 25, 2024

• Warren Buffett and Berkshire Hathaway $BRK.B filed for its sale of another 18.9M shares of Bank of America $BAC for ~$802.5 Million (Pre Tax)



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[gfp927z]

Bank of America - >>> Warren Buffett Just Sold $1.5 Billion of Berkshire Hathaway's Second-Largest Holding. Here's Why.


Motley Fool

by Adam Levy

Jul 24, 2024


https://finance.yahoo.com/news/warren-buffett-just-sold-1-081700022.html


Warren Buffett keeps selling stocks. The Oracle of Omaha has been a net seller of equities for his company's portfolio in each of the last six quarters, as reported by Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). The odds are good he'll make it seven in a row when Berkshire reports next month, and now he's going for eight with another major stock sale.

A recent filing with the U.S. Securities and Exchange Commission (SEC) revealed that Buffett sold $1.5 billion of Berkshire Hathaway's second-largest equity holding, Bank of America (NYSE: BAC). The sale represents just a 3.3% reduction in Berkshire's stake in the bank but could be just the start.

There's no doubt Bank of America has been a very successful investment for Buffett and Berkshire Hathaway shareholders. And Buffett is famously quoted as saying his favorite investment holding period is "forever." So why is he selling shares now?

There are a few reasons Buffett might have sold Bank of America stock.

After the stock's strong performance over the last eight months, shares are currently trading at levels unseen since the start of 2022. Despite the strong financial and operational performance underlying that price appreciation, Buffett may believe the shares are now fully valued, so he's taking money off the table as a result.

Another reason may have less to do with the current valuation and more to do with locking in gains at a favorable tax rate. Buffett's cost basis on those Bank of America shares is just over $14, on average. That means over two-thirds of the proceeds from Buffett's sales are taxable gains.

Buffett hasn't been shy about taking gains on some of his favorite stocks lately. He sold billions worth of Apple (NASDAQ: AAPL) shares in the fourth and first quarters.

When asked why he sold Apple shares at the annual shareholder meeting in May, Buffett explained that he was happy to pay taxes at the current favorable tax rate of 21%. He expects the rate will increase in the future. However, he said he expects Apple to remain Berkshire Hathaway's largest equity holding for some time.

The same factors may have led him to take the tax hit on Bank of America shares now. That may suggest Buffett still likes the business and the stock but doesn't see it growing as quickly as it has in the recent past — at least not enough to justify paying higher taxes on the gains later.

Should you buy or sell Bank of America stock?

Bank of America saw its shares fall in price as interest rates climbed. That's because the bank has high exposure to longer-duration bonds, which currently carry low interest rates. As a result, the bank missed out on opportunities to buy securities with higher coupons as interest rates climbed.

Bank of America's decision to invest in longer-duration bonds has an outsized effect on a metric called net interest income (NII). That's the difference between the revenue generated by the bank's interest-bearing assets and the expense it pays on interest-bearing liabilities. Since the bank holds long-term bonds but has to pay market rates, NII declined as interest rates increased.

But management says NII has hit its trough. It's forecasting growth in the third and fourth quarters this year, reaching $14.5 billion in the fourth quarter.

The good news is Bank of America is poised to do well, relative to its peers if the Fed cuts interest rates (as it is expected to later this year). The knife cuts both ways, so to speak.

With a price-to-book value of 1.25, Bank of America's shares look fairly priced. Buffett's sale appears to be more about taxes than anything specific about the company or its stock.

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[DiscoverGold]

Warren Buffett's Berkshire Hathaway sold nearly $1.5 BILLION in Bank of America $BAC shares last week. This was their first time selling since 2019
By: TrendSpider | July 22, 2024

• BREAKING:

Warren Buffett's Berkshire Hathaway sold nearly $1.5 BILLION in Bank of America $BAC shares last week.

This was their first time selling since 2019.



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[Monksdream]

BRK.B new 52=week high

[DiscoverGold]

Warren Buffett's Berkshire Hathaway $BRK.B is currently trading at new ALL TIME HIGHS
By: Evan | July 15, 2024

• Warren Buffett's Berkshire Hathaway $BRK.B is currently trading at new ALL TIME HIGHS



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[DiscoverGold]

$BRK.B Double inside days just below resistance?
By: TrendSpider | July 10, 2024

• Double inside days just below resistance?

We call that the Buffett bomb. $BRK.B



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[DiscoverGold]

Berkshire Hathaway Equity Portfolio Tops $400 Billion. The Stock Is Lagging
By: Barron's | July 10, 2024

Berkshire Hathaway's equity portfolio has moved above $400 billion led by a recent surge in the company's largest holding, Apple, which hit a record high Tuesday.

The rising value of the Berkshire equity portfolio, which is tracked by CNBC based on the most recent filings, hasn't done a lot for Berkshire's share price. It is up about 1% so far this quarter, below where it stood at the end of the first quarter.

Berkshire's Class A shares are up 0.7% Tuesday to $618,400 but are behind the S&P 500 this year with a gain of 14.3%, about three percentage points behind the index. When Berkshire peaked at nearly $650,000 in late February, it was comfortably ahead of the market. The Berkshire Class B shares are up 0.5% at $411 Tuesday.

Berkshire fans see opportunity with the stock lagging behind the portfolio and the valuation of the shares contracting.

Berkshire now trades for about 1.45 times our estimate aof June 30 book value of $425,000 per class A share and closer to 1.4 times our estimate of the current book value of $430,000 per A share. The stock peaked at over 1.6 times book earlier this year and is now in line with its five-year average.

The equity portfolio now accounts for about 45% of Berkshire's market value of $890 billion. The stock trades for about 21 times estimated 2024 earnings per share but the valuation is lower based on "look-through" earnings, a measure favorite by some Berkshire watchers that includes a pro rata share earnings of the companies in the equity portfolio.

The Berkshire portfolio is dominated by Apple, which represents about 44% of the holdings. CNBC includes all the Berkshire equity holdings in its calculation, including Kraft Heinz and Occidental Petroleum, which Berkshire carries separately under the equity method of accounting since it owns over 20% of both companies. Those two holdings total about $25 billion.

But Apple is the driver of the Berkshire portfolio even with CEO Warren Buffett cutting the Apple stake by more than 10% in the first quarter of 2024 to about 790 million shares. Some Berkshire watchers expect a further reduction in the Apple stake in the second quarter. The company is due to report results on Aug. 3.

Apple has surged 33% since the end of first quarter and hit a new high Tuesday. The stock is 0.2% at $228.25 and has risen 8% since June 30, reclaiming the top spot in the stock market from Microsoft and Nvidia.

Apple is now ahead of the S&P 500 this year. Other winners in the Berkshire equity portfolio this year include Bank of America and American Express.

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[DiscoverGold]

$BRK.B Uncle Warren is looking ready to rip
By: TrendSpider | July 6, 2024

• Uncle Warren is looking ready to rip. $BRK.B.



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[DiscoverGold]

Why Investors are Betting Big on Berkshire Hathaway Class B Shares Right Now
By: Karl Montevirgen | June 26, 2024

• Berkshire Hathaway Class B shares are poised for an explosive breakout
• Fundamentally, BRK/B has been a consistent outperformer and is diversified among different sectors
• BRK/B is working its way through a symmetrical triangle formation and could breakout in either direction

Berkshire Hathaway needs no introduction. The name is synonymous with two iconic investors—Warren Buffett (the Oracle of Omaha) and the late Charlie Munger.

Currently, Berkshire's Class B shares (BRK/B) appear to be hovering at a tense standstill, poised for a major breakout either upward or downward. The shares are midpoint at a narrowing symmetrical triangle pattern. Which way is it likely to break? And is it still a worthy investment?

Why Buy Berkshire Hathaway Shares?

Here are four reasons:

1— Berkshire Hathaway tends to beat the S&P 500 over 90% of the time. In the image below, StockCharts' PerfCharts illustrates BRK/B's relative performance against the broader market.


CHART 1. PERFCHART COMPARING BRK/B TO THE S&P 500. The definition of outperformance?

2— BRK/B provides instant diversification in sectors (though not weightings). Still, the company's holdings in insurance, utilities, energy, transportation, and consumer goods are well-thought and managed (it's Warren Buffett, after all).

3— The company is loaded with cash. This is a big deal: if the market crashes, Berkshire Hathaway has plenty of ammo to take advantage of buying value stocks at a low price while everyone on Wall Street is panicking.

4— Share prices are still reasonably valued. Its P/B ratio is 1.55; you can view this using StockCharts' Symbol Summary.

Looking Back 20 Years

BRK/B may not have the most impressive SCTR score (68.5), but again, looking back over 20 years, it has averaged around the 60 range. Still, its uptrend has been nothing less than impressive.

Looking at a weekly chart, its relative performance against the S&P 500 ($SPX) shows a consistent beat, save for the years leading up to the 2008 financial crisis and the 2000 Dot.com bubble (not shown on the chart).


CHART 2. 20-YEAR WEEKLY CHART OF BRK/B. Note that not all mediocre SCTR readings indicate mediocre performance.

Is BRK/B Poised for an Explosive Move?

Take a look at BRK/B's daily chart (see below).


CHART 3. DAILY CHART OF BRK/B. It appears as if BRK/B shares are poised for an explosive move. Still, triangle formations can go either way; the trick to getting the odds in your favor is to look at the buying or selling pressure leading to the anticipated breakout.

Currently, BRK/B is working its way through a symmetrical triangle formation, which, according to Edwards and Magee in Technical Analysis of Stock Trends (1948), suggests that roughly 75% of symmetrical triangles are continuation patterns and the rest mark reversals. Still, the direction of price movement in triangle patterns is uncertain until a breakout occurs. The breakout will provide confirmation of the potential price direction.

But if you look at the momentum leading up to the anticipated breakout, the signs are bullish, as both the Chaikin Money Flow and Accumulation/Distribution Line indicate that buying pressure is on the rise.

Whether you go long following an upside breakout or before it takes place, a few points below the bottom of the triangle formation at $395 serves as a good stop loss level, as it also marks the most recent swing low. If price falls below that level, the next "technical" support level will likely be in the $370 range.

The Takeaway

Berkshire Hathaway Class B shares (BRK/B) have a lot going for them, making them a solid buy for many investors. The stock often outpaces the S&P 500, provides robust diversification, the company has ample cash reserves, and its current valuation is attractive. While the stock's near-term movement is uncertain as it navigates a symmetrical triangle pattern, momentum suggests a positive breakout could be on the horizon. But it all boils down to this: would you bet in favor of or against the Oracle of Omaha?

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>>> Warren Buffett Just Bought $435 Million of This Stock and Plans to Hold It Forever


by Adam Levy

The Motley Fool

Jun 26, 2024


https://finance.yahoo.com/news/warren-buffett-just-bought-435-085000603.html


Lately, there aren't a lot of stocks Warren Buffett has found interesting enough to add to Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) $385 billion portfolio. Buffett, through Berkshire, has made only a handful of purchases during the current bull market.

Truth be told, Buffett has sold more stocks than he's bought in each of the last six quarters. Some of his biggest sales last quarter included a portion of his top holding, Apple, as well as all of Berkshire's position in Paramount Global stock and the rest of Berkshire's stake in HP. But he's been consistently adding to some positions in 2024, including one of his biggest holdings.

So far in June, Buffett spent another $435 million on Occidental Petroleum (NYSE: OXY) to make it Berkshire's sixth-largest position.

More recent Securities and Exchange Commission filings reveal purchases of Occidental Petroleum between June 5 and June 17. Buffett has been snapping up shares of Occidental when it trades around $60 per share, and investors may want to follow his lead.

A stock Buffett plans to hold forever

Buffett originally invested in Occidental in 2019, when he purchased $10 billion of preferred shares directly from the company for Berkshire Hathaway. That $10 billion investment helped finance Occidental's acquisition of Anadarko, strengthening its position in the Permian Basin.

While that acquisition left Occidental laden with debt just ahead of a tough period for the energy market that nobody could have predicted (the COVID-19 pandemic), management admirably navigated through the challenging environment. It suspended its dividend and strategically sold off assets to deleverage its balance sheet, and it's once again on solid footing.

Buffett has since added to his position in Occidental. With the most recent $435 million purchase, Berkshire Hathaway now owns about 28.8% of shares outstanding -- a stake worth about $15.9 billion. It also still owns about $8.5 billion of preferred shares, which include warrants to buy more of the company's common stock at $59.62 a share (it currently trades around $62.90).

In his most recent letter to Berkshire shareholders, Buffett praised Occidental CEO Vicki Hollub, saying the energy stock is a holding he plans to maintain indefinitely. "Under Vicki Hollub's leadership, Occidental is doing the right things for both its country and its owners," Buffett wrote. "We particularly like its vast oil and gas holdings in the United States, as well as its leadership in carbon-capture initiatives."

Occidental will add to its leading position in the Permian Basin this year with its $12 billion acquisition of CrownRock, which is set to close in the third quarter. Hollub will likely follow the same playbook as with the much larger Anadarko acquisition, selling off non-essential assets to reduce the amount of debt on Occidental's balance sheet. It's already exploring a sale of Permian assets worth over $1 billion, according to a report from Reuters in May.

A big bet on oil prices

While Occidental is an integrated energy company, the bulk of its revenue and income comes from drilling. It's in the business of acquiring land and separating oil from rock. That means that its profits depend heavily on the price of oil.

When it announced the CrownRock acquisition at the end of last year, it estimated it could generate an additional $1 billion in annual free cash flow assuming oil prices remain above $70 per barrel.

Hollub now expects oil prices to remain in the $80 to $85 range through 2025. Oil prices took a hit after the members of OPEC+ agreed earlier this month to a plan that would extend their production cuts into 2025, but that would also allow eight member nations to start easing back from their voluntary cuts beginning in October. However, crude prices quickly recovered to around $80.

Buffett took the opportunity to buy Occidental when oil prices came down, and he has already benefited from the slight recovery. Even if oil prices remain relatively stable, Occidental is well-positioned to generate significant cash flow for its shareholders.

Should investors follow Buffett's lead?

As mentioned, Buffett is buying Occidental shares practically any time they dip below $60. At that price, the stock trades at around 14 times forward earnings. That puts it firmly in the value stock territory, but it's not as attractive a valuation as some other oil producers and integrated energy companies carry.

But Occidental, under Hollub, is far more aggressive at growing its bottom line via acquisition and cost-cutting. That could result in far better profit growth over the long run, especially if oil prices consistently move higher. Her strategy brings with it considerable risk, but it also comes with much more potential growth in the long run. In the meantime, the company is certainly stable enough, generating plenty of cash to continue growing its operations while paying a nice dividend.

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$BRK.B The path of least resistance always wins
By: TrendSpider | June 24, 2024

• The path of least resistance always wins



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Warren Buffett and Berkshire Hathaway $BRK.B filed for their purchase of more Occidental $OXY
By: Evan | June 18, 2024

• Warren Buffett and Berkshire Hathaway $BRK.B filed for their purchase of more Occidental $OXY



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Warren Buffett Sells More BYD Stock
By: Barron's | June 17, 2024

Berkshire Hathaway is selling shares of the Chinese electric-vehicle maker BYD again, leaving investors wondering what Warren Buffett's company thinks about the Chinese car maker and the EV market.

On June 11, Berkshire sold about 1.3 million BYD shares listed in Hong Kong, leaving Warren Buffett's company with about 75.7 million shares worth about $2.3 billion. Berkshire didn't immediately respond to a request for comment about the sale.

That Berkshire is scaling back its holdings is nothing new. Buffett's company has been unloading stock since 2022. More than a dozen sales have taken its stake down by roughly two-thirds from the peak of about 225 million.

Berkshire might be taking profits or its management might be worried about slowing EV sales growth or more EV competition. Investors just can't be sure.

In the past, Buffett has called the auto industry difficult, while Buffett's former partner Charlie Munger praised BYD and its lead over Tesla.

BYD shares rose 1.7% in overseas trading on Monday. Its U.S.-listed American depositary receipts were up 1.8% in premarket trading, while futures on the S&P 500 and Nasdaq Composite were flat and up 0.2%, respectively.

The stock's gain isn't a shock. The sales have already happened, and Berkshire has been a seller for years.

Coming into Monday trading, BYD's Hong Kong-listed shares were up about 9% so far this year. Investors have been balancing increasing competition among EV companies against growth in sales. Through May, BYD had shipped almost 1.3 million EVs this year, about 27% more than in the first five months of 2023.

BYD sells both plug-in hybrids and all-battery electric vehicles.

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Warren Buffett loves $OXY! Berkshire Hathaway just loaded up again with a purchase of 1,750,308 shares worth approximately $105.5 million
By: Barchart | June 13, 2024

• Occidental Petroleum Insider Trading Alert

Warren Buffett loves $OXY! Berkshire Hathaway just loaded up again with a purchase of 1,750,308 shares worth approximately $105.5 million



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Berkshire Hathaway Buys Additional 2.6 Million Shares of Occidental Petroleum
By: MT Newswires | June 10, 2024

Berkshire Hathaway BRK.A bought an additional 2.57 million shares in Occidental Petroleum's OXY
common stock over June 5 to June 7, the energy producer said Friday in a regulatory filing.

Following the recent share purchases, Berkshire Hathaway currently owns about 250.6 million shares of Occidental Petroleum, Reuters reported. Berkshire controlled around 28% shares of Occidental Petroleum as of March, according to the report.

Berkshire Hathaway bought 524,340 shares at $59.7452 per share on June 5, followed by 654,293 more shares bought for $59.934 per share on June 6, and an additional 1,386,844 shares purchased at $59.6687 per share on June 7.

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Berkshire Hathaway $BRK.B looks ready to rip
By: TrendSpider | June 8, 2024

• Uncle Warren looks ready to rip. $BRK.B



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For those who've never seen it ... this is what Warren Buffett and Berkshire Hathaway's $BRK.B website looks like
By: Blossom | June 7, 2024

• For those who've never seen it ... this is what Warren Buffett and Berkshire Hathaway's $BRK.B website looks like



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Berkshire Hathaway owns 3% of the entire Treasury Bill market according to JP Morgan
By: Barchart | June 2, 2024

• Warren Buffett's Berkshire Hathaway owns 3% of the entire Treasury Bill market according to JP Morgan



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$BRK.B - Buffett holding up better than most
By: TrendSpider | May 31, 2024

• Buffett holding up better than most $BRK.B



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[Prudent Capitalist]

Berkshire Stock Looks Good After Selloff as Book Value Grows on Apple Rally

https://www.msn.com/en-us/money/markets/berkshire-stock-looks-good-after-selloff-as-book-value-grows-on-apple-rally/ar-BB1ndFiZ?ocid=msedgdhphdr&cvid=b3d0f20496aa4f30a4bfc962222518af&ei=20

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Berkshire Hathaway Stock: Analyst Estimates & Ratings
By: Barchart | May 28, 2024

Berkshire Hathaway Inc. (BRK.B), with a IYG 33.4% gains over the past 52 weeks. But the stock's YTD gains outpace the exchange-traded fund's 10.4% returns for the same period.

Berkshire Hathaway's underperformance over the past year is due to its heavy reliance on slow-growth sectors like insurance and utilities, coupled with missed opportunities in high-growth areas due to its conservative investment approach. However, the stock surged after the company reported robust Q1 results on May 4, featuring a record $11.2 billion operating profit driven by strong insurance earnings.

For the current fiscal year, ending in December, analysts expect BRK.B's EPS to grow by 8.9% to $18.70. The company's earnings surprise history is mixed. It beat the consensus forecast in three of the past four quarters while missing on one other occasion.

Among the three analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on one “Strong Buy” rating and two “Holds.”

This configuration has been consistent over the past months.

The mean price target of $490 suggests a 20.3% premium over BRK.B's current levels.

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[UnstableElement]

buffets mystery stock purchase .https://www.msn.com/en-us/money/topstocks/warren-buffett-s-berkshire-reveals-its-mystery-stock-chubb/ar-BB1msaN7?ocid=msedgntp&pc=LCTS&cvid=8d8b4f3411ba4ce0a166b6d45adc578c&ei=12

[gfp927z]

Looks like the 'mystery stock' is Chubb -


>>> Buffett’s Berkshire Reveals $6.7 Billion Stake in Insurer Chubb


Bloomberg

by Annie Massa

May 15, 2024


https://finance.yahoo.com/news/buffett-berkshire-reveals-6-7-203349962.html


(Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc. unveiled a $6.7 billion stake in insurer Chubb Ltd., ending months of suspense over its mystery position in a financial firm, previously kept concealed in regulatory filings.

Berkshire disclosed the holding in a filing on Wednesday, reflecting its positions at the end of the first quarter.

The conglomerate has been building the stake since 2023 but it hadn’t previously been reported because the Securities and Exchange Commission allowed Berkshire to keep it confidential. Still, separate quarterly filings reflected that Berkshire’s equity stakes in banks, insurance and finance companies were growing, while the firm was pulling back in other industries including consumer products.

“Millions of people follow what Buffett does,” said David Kass, a finance professor at the University of Maryland‘s Robert H. Smith School of Business, explaining why Berkshire wants confidentiality while it amasses big positions. “Warren Buffett would be more sensitive to the issue than others.”

Chubb stock jumped in after-hours trading, adding as much as 9.9%.

Buffett’s Berkshire is deeply familiar with the insurance industry, owning a range of companies including Geico and National Indemnity. The billionaire investor has called Berkshire’s property-casualty insurance operation the “core” of the conglomerate, helping generate “float” that can then be reinvested.

The conglomerate has also invested in other businesses in the insurance industry. Berkshire owns a stake in Aon Plc, a major broker, and has previously bet on rivals including Marsh & McLennan Cos.

Cash Pile

Chubb is one of the biggest property-casualty insurers in the US and operates in 54 countries globally. Its chief executive officer, Evan Greenberg, is the son of Maurice “Hank” Greenberg, who led American International Group Inc. for many years. Evan Greenberg built Chubb through the 2016 merger of Ace Ltd. and Chubb Corp., which created a massive insurer that covers a range of risks including cyber attacks and marine shipping.

Chubb insured Baltimore’s Francis Scott Key Bridge, which collapsed when a cargo ship slammed into it in late March. It’s reportedly set to pay out $350 million to the state of Maryland.

Buffett already revealed a few recent changes to his company’s holdings at Berkshire’s annual meeting in Omaha earlier this month. It trimmed a stake in Apple Inc. to $135.4 billion at the end of the first quarter, as the iPhone maker faces a range of struggles including an antitrust fine, sliding sales in China and a failed car project.

The billionaire investor heaped praise on the tech giant at the meeting — which Apple CEO Tim Cook attended — and said it will remain Berkshire’s largest investment barring any dramatic changes.

The cash pile at Berkshire reached a record $189 billion at the end of March. Buffett said at the annual meeting that it was “a fair assumption” that it will hit $200 billion by the end of this quarter.

Funds with more than $100 million must file disclosures about their holdings within 45 days of the end of each quarter, providing a glimpse into the holdings of secretive money managers including hedge funds and large family offices.

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Here are all of the changes Warren Buffett and Berkshire Hathaway $BRK.B made to its portfolio during Q1
By: Evan | May 15, 2024

• Here are all of the changes Warren Buffett and Berkshire Hathaway $BRK.B made to its portfolio during Q1

- Started a new position in Chubb $CB
- Fully sold out of HP $HPQ



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JUST IN: Warren Buffett and Berkshire Hathaway's $BRK.B portfolio has been updated
By: Evan | May 15, 2024

• JUST IN:

Warren Buffett and Berkshire Hathaway's $BRK.B portfolio has been updated



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[bar1080]

BRK hasn't paid a dividend in many decades

[Premium Stocks]

Does this pay DIVIDEND ?

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Warren Buffett's company rejects proposals, but it faces lawsuit over how it handled one last year
By: Yahoo | May 4, 2024

OMAHA, Neb. (AP) — Shareholder proposals are usually uneventful at Berkshire Hathaway's annual meeting. But Warren Buffett and the company are now facing a lawsuit over the way one presenter was treated last year.

Peter Flaherty with the National Legal and Policy Center came back with another proposal this year on a different subject even after he was cut off in the middle of his presentation last year and arrested for trespassing. The charges were later dropped, but Flaherty decided to sue because of the way he was treated to stand up for any shareholder who wants to bring a proposal. He said he had never had trouble at dozens of meetings he has presented at since 2005, including Berkshire’s 2022 meeting.

“I’ve never been interrupted while making a shareholder presentation. I’ve never had my mic cut, and I’ve never been removed from a meeting room. And I’ve certainly never been arrested,” Flaherty said, “Those things were unprecedented for me.”

The issue last year was that Flaherty questioned the character of one of Buffett's best friends and a former Berkshire board member, Bill Gates. Flaherty suggested that Buffett's close association with Gates could hurt Berkshire's reputation because of reports that Gates had been associated with Jeffrey Epstein before he was arrested for sex trafficking. So he was proposing that Berkshire give someone else Buffett's chairman title while leaving him as CEO.

Buffett has donated billions to Gates’ foundation over the years and plans to give him the bulk of his fortune to distribute.

Berkshire didn't immediately respond to the federal lawsuit that was filed Friday, and it wasn't mentioned during Saturday's meeting. Berkshire officials didn't even address any of the proposals during the meeting — instead they relied on their statements of opposition that were filed in the official meeting proxy.

Buffett stayed silent during the business meeting after spending all day Saturday answering shareholder questions at the main part of the shareholder meeting. He let his eventual successor Vice Chairman Greg Abel take the lead. He only reminded the presenters of all six proposals to keep their comments related to the proposals.

Flaherty’s proposal was one of six rejected at Berkshire’s meeting this year. They were all opposed by the board, and Buffett still controls roughly one-third of the vote so anything he opposes is almost certain to fail. None of the proposals received more than 85,000 votes. Flaherty’s proposal only drew 6,150 votes while getting 443,544 votes against it.

Some of the other proposals rejected Saturday included ones to require Berkshire to create reports on climate change risks and diversity and inclusion efforts at the massive conglomerate. Another proposal would have required Berkshire to create a board committee focused on railroad safety.

The safety chief for the SMART-TD rail union that represents conductors and other rail workers, Jared Cassity, said that if BNSF wants to argue that safety is the railroad's top priority, Berkshire's board should focus on it and review staffing and operational practices to help prevent derailments like the disastrous one Norfolk Southern had last year in East Palestine, Ohio.

“Railroad safety requires effective board oversight,” Cassity said.

Berkshire argued that BNSF is already focused on improving safety and doesn't need more oversight.

With regard to the other proposals, Berkshire officials argued that such reports would be cumbersome because of the decentralized way the company is run and unnecessary. Plus, some of its subsidiaries like its massive utility unit already produce reports on greenhouse gas emissions, Berkshire said.

This year, Flaherty was allowed to make his case that Berkshire should produce a report on the risks of doing business in China, before the proposal was summarily rejected.

“China poses unique risks for Berkshire Hathaway,” Flaherty said, arguing that the company's existing disclosures about subsidiaries like Fruit of the Loom that have factories in China are inadequate.

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Berkshire Hathaway Inc reports results for the quarter ended in January - Earnings Summary
By: Reuters | May 6, 2024

• Berkshire Hathaway Inc BRK.A reported quarterly adjusted earnings of $7,796.47?? per share for the quarter ended in January, higher than the same quarter last year, when the company reported EPS of $5,537.48. The mean expectation of two analysts for the quarter was for earnings of $6,824.88 per share. Wall Street expected results to range from $6,294.00 to $7,355.76 per share.

Revenue rose 5.2% to $89.87 billion from a year ago; analysts expected $87.04 billion.

Berkshire Hathaway Inc's reported EPS for the quarter was $8,825.00?.

The company reported quarterly net income of $12.7 billion.

Berkshire Hathaway Inc shares had fallen by 5.0% this quarter and gained 11.1% so far this year.

FORECAST CHANGES

The mean earnings estimate of analysts had risen by about 2.2% in the last three months.?

In the last 30 days, there have been no negative revisions of earnings estimates

RECOMMENDATIONS

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy," 1 "hold" and no "sell" or "strong sell."

The average consensus recommendation for the consumer goods conglomerates peer group is "hold."

Wall Street's median 12-month price target for Berkshire Hathaway Inc is $697,410.00

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[Prudent Capitalist]

The memorial video tribute to open the meeting was very impressive and moving.

[bar1080]

Berkshire pares huge Apple stake as cash, operating profit set records

SHM: OMAHA, Neb. (Reuters) - "Berkshire Hathaway significantly reduced its enormous stake in Apple in the first quarter, as Warren Buffett's conglomerate let its cash hoard swell to a record $189 billion.

Buffett's company also posted a record operating profit exceeding $11 billion, as its insurance operations benefited from improved underwriting and higher income from investments as interest rates rose.Based on changes in Apple's stock price, Berkshire appears to have sold about 115 million shares, or 13% of its holdings, in the quarter, ending with about 790 million."

https://finance.yahoo.com/news/berkshire-posts-record-operating-profit-121448596.html.

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What's Next for Berkshire Hathaway
By: Barron's | April 26, 2024

With CEO Warren Buffett, 93, headed for the end of his reign, questions are swirling about the company's future. The case for buying the stock now. By Andrew Bary

Warren Buffett will be at center stage, as usual, during Berkshire Hathaway's annual meeting. But investors are increasingly looking for clues on what the company will be like when the longstanding CEO and chairman is no longer running it.

Berkshire could come under pressure to break itself up when the world's most acclaimed investor exits the stage. It might decide to pay a dividend rather than amass cash, as it does today while Buffett, 93, waits for investing opportunities. Buffett can expect to face questions on all these topics and more at the annual meeting on May 4 in Omaha, Neb.

Charlie Munger, Warren Buffett's longtime friend, business partner, and Berkshire vice chairman, who died last year at 99, won't be at his side. Munger's absence will only reinforce the obvious: Buffett's time atop the conglomerate he built over six decades could end during the next few years. Even Buffett acknowledges as much, writing in November that he felt "good" but was "playing in extra innings."

For some 30,000 Berkshire shareholders expected to attend the meeting, the future will be the focus as Buffett fields questions for more than five hours in what could be his only public appearance of the year. Joining Buffett on the dais will be Vice Chairman Greg Abel, 61, likely tasked with the role of Buffett's successor as CEO, and Vice Chairman Ajit Jain, 72, who runs the company's insurance operations. Together they will answer questions small and large: Can the stock beat the S&P 500 index? Why have share repurchases declined since 2021? Can the company's new management prove anywhere as capable as Buffett? Should Berkshire break up?

But really, everyone will be focused on the same thing.

"Whether it's said out loud or not, succession is front and center on the minds of investors," says Cathy Seifert, a CFRA Research analyst.

There is nothing like Berkshire. It has had an extraordinary run since Buffett took control of a struggling textile maker in 1965 and turned it into the world's largest conglomerate, with nearly 400,000 employees and U.S.-centric businesses that offer one of the best reads on the health of the economy. Some of its largest divisions are the Burlington Northern Santa Fe railroad; Berkshire Hathaway Energy, which operates a multistate electric utility business that is one of the largest producers of green power in the country; and the world's biggest property and casualty insurer, including Geico, the No. 3 auto insurer.

There are smaller units, such as NetJets, the leader in private jet travel; Clayton Homes, the top maker of manufactured housing; Benjamin Moore paints; Dairy Queen; and one of the largest real estate brokerage businesses in the country. Then there is a $360 billion equity portfolio led by Apple, which accounts for about 40% of Berkshire's holdings. There also is what Buffett calls a Fort Knox balance sheet, with nearly $170 billion in cash and equivalents.

Berkshire isn't run like other conglomerates. It is unusually decentralized, with Buffett leaving key decisions at subsidiaries largely to the managers of the individual companies. He wrote in the Berkshire "Owner's Manual" in 2017 that "we delegate almost to the point of abdication." Berkshire has a tiny headquarters staff of 26 with no corporate counsel, investor relations, or public relations staff.

Berkshire's unusual strategy has worked. The company is expected to generate $40 billion of after-tax operating earnings this year and has a market capitalization of $880 billion, the seventh-largest in the stock market. The company's Class A stock has risen to over $600,000 a share from $20 (there have been no stock splits along the way) since Buffett took over in 1965, and holders who bought the now widely held Class B shares when they were created in 1996 have seen that stock rise 20-fold. It's one of the most widely held stocks by individuals, with some three million shareholders. Probably no other company elicits the passion and loyalty of its investor base. Big institutions have never appreciated the stock as much as individuals.

But will they continue to, once Buffett is no longer running the show? So central is Buffett to Berkshire's business that four or five people will take over the role that he maintained until 2018, when he delegated responsibility for Berkshire's non-insurance businesses to Abel and the insurance operations to Jain.

Abel is due to become CEO, which involves overseeing Berkshire's vast array of businesses and likely determining capital allocation, a critical role at the company that Buffett has performed so well for nearly 60 years. That means deciding whether to use earnings to repurchase stock, pay dividends, build cash, or make acquisitions. Jain is likely to remain head of the insurance business, while Buffett's older son, Howard, 69, a farmer and philanthropist, probably will become nonexecutive chairman.

Then there are Todd Combs, 53, and Ted Weschler, 61, who now run about 10% of Berkshire's equity investments and probably will run the entire portfolio. Berkshire doesn't say which stocks in the equity portfolio are run by Combs and Weschler, but Berkshire watchers think that many of the smaller holdings — under $4 billion — are theirs. These include Charter Communications, DaVita, Liberty Sirius XM, Amazon.com, Snowflake, Visa, and Mastercard. Buffett hasn't commented on their performance relative to the market since 2019 — when he said they were slightly behind it since joining the company more than a decade ago. We estimate that both are probably lagging behind the market since their tenures began, given the underperformance of some of their rumored holdings in recent years.

Investment manager Bill Smead, who heads the Smead Value fund, would like to hear from Combs and Weschler. "Not introducing Todd and Ted is an unforgivable sin. If Warren dies tomorrow, they are the stockpickers, and they have never answered or been asked a question at the annual meeting."

Combs is a key member of the Berkshire bench and could be a backup to Abel as the Buffett successor or a potential successor to Abel as CEO. Combs has a good rapport with Buffett and has experience beyond investments as CEO of Geico for past four years and as a JPMorgan Chase board member. One candidate to succeed Jain as head of the insurance operations is Joe Brandon, who runs Alleghany, an insurer that Berkshire bought in 2022.

Buffett's three children, Howard, Susan, and Peter, will be in the mix after Buffett's death since they will oversee a charitable trust that will hold Buffett's now 15% economic stake in Berkshire, which has voting power of over 30% because it consists almost entirely of supervoting A shares. The Buffett stake will allow the children to wield considerable power, at least for several years, as the trust will liquidate over about a decade.

While Buffett acknowledges that he has slowed down in recent years, he looked sharp at the 2023 meeting. He talked for five hours, fortified with a Coke and peanut brittle from See's Candies, a Berkshire company. He showed command of all things Berkshire, the economy, and financial markets, both past and present. He is the last of a breed. Three years ago, there were four Berkshire directors age 90 or over — all longtime friends of Buffett — and they all are dead: Munger, David "Sandy" Gottesman, Tom Murphy, and Walter Scott. Smead says that without the outspoken Munger to prod him, Buffett may be more restrained at this year's meeting.

That won't stop investors from peppering him with questions. How long do you expect to run the company? What do Berkshire's slowing stock repurchases say about your views on the stock? Can Geico, which has slipped behind Progressive in auto insurance market share and technology, catch up? Would Berkshire walk away from its Western utilities and let them go bankrupt in the face of wildfire liabilities? Do you think it will make sense to pay a dividend once you're gone?

Buffett says he expects tough questions. "That's the way we like it," he wrote earlier this year.

"There will be more discussion of the possibility of a dividend at some point in time," says Ted Bridges, CEO of Bridges Trust, an Omaha investment manager. Buffett has conceded that buying public and private businesses is tough now, given higher valuations. And Berkshire handicaps itself by refusing to participate in corporate auctions. The dividend issue arouses passion among many individual Berkshire holders who don't want them, in part for tax reasons.

An important question, asked or not, is what will happen to Berkshire shares when Buffett steps down or dies. They may take a hit of perhaps 5% to 10%, as longtime holders cash out and investors worry that the Buffett magic will disappear. Buffett, though, has said he thinks the stock will go up on the day after his death as investors anticipate a value-enhancing corporate breakup.

There's a case to be made for a breakup. It's the world's biggest conglomerate at a time when conglomerates have fallen out of favor, with the likes of General Electric and United Technologies having broken up in recent years. For all of Buffett's investment acumen and business smarts, Berkshire stock is about even with the S&P 500 as measured by total return over the past 10 years and 20 years, Bloomberg calculations show. The stock has returned 12.4% annually over the past 10 years, against 12.5% for the S&P 500. Buffett has said that Berkshire needs to top it over time or investors should consider looking elsewhere.

All the massive outperformance came in Buffett's first 40 years at the helm, when the company was smaller and Buffett had a particularly hot investment hand, scooping up big stakes in companies like Coca-Cola and American Express at cheap prices. Size, too, is an impediment to outsize returns.

Buffett hasn't had a lot of new winners in the past decade. The company's largest acquisition — the 2016 purchase of Precision Castparts for $33 billion — has been a bust. Buffett has had some misses in the stock market, selling a group of financial stocks including Wells Fargo and JPMorgan Chase in 2020 and 2021 at about half their current prices. Of course, Apple has been a huge win with Berkshire's stake, now worth over $150 billion, compared with a cost of around $30 billion. But the iPhone giant is having a rough 2024, and its stock is down more than10% year to date.

Berkshire shares look like a good bet to match or beat the S&P 500 even after Buffett leaves the scene. The stock now looks appealing, valued at 1.5 times its projected March 31 book value of nearly $400,000 per Class A share and for 22 times estimated 2024 earnings. (Berkshire is due to report its first-quarter results on May 4.) Berkshire is slightly expensive relative to its five-year average of 1.4 times book value. The stock is ahead of the market this year and over the past five years.

Book value is an old-fashioned valuation measure but is still relevant for Berkshire because of its large insurance operations — insurers still get valued on book — and because it has been a historical yardstick for the company since Buffett took over.

Buffett chooses to focus on intrinsic value but doesn't disclose his estimate of that figure. Buffett has said that book value is a greatly understated proxy for intrinsic value, although share repurchases at current prices do reduce book value, somewhat undercutting the use of that measurement.

Post Buffett, Berkshire's stock is likely to be supported by steady growth in its earnings and shareholder equity over time. The company appears capable of high-single-digit annual growth in book value based on $40 billion of operating income after taxes and gains in the $360 billion equity portfolio. If the stock keeps pace with the growth in book value, it could show similar share price growth.

A dividend is a good bet within a few years of Buffett's death. Why? It will help his successor disburse some of the annual operating earnings. Another reason is that investors won't be so tolerant of Berkshire holding so much cash — a record $168 billion at year-end 2023 — without Buffett at the helm.

Christopher Bloomstran, chief investment strategist at Semper Augustus Investment Group, wrote earlier this year that Berkshire stock could generate a 10% to 11% annualized return over the next 10 years, with annual share buybacks in the 2% to 3% range — above the recent rate of 1% to 1.5%. He pegged intrinsic value at around $720,000 a share.

UBS analyst Brian Meredith is one of the few Berkshire bulls among Wall Street analysts. He recently lifted his price target to about $722,000 per Class A share from $715,000. He sees improvement at both Geico and Burlington Northern. Berkshire is one of the most defensive big stocks in the market, given its balance sheet and earnings power. A market selloff could offer opportunities for Buffett.

Buffett is firmly against a breakup. He argues the conglomerate structure has numerous attributes, including tax benefits from the ability to quickly make use of any big catastrophe losses at Berkshire's insurance companies. Buffett has expressed confidence in the company's future, writing last year that "Berkshire has been built to last." And the company's Buffett-friendly 14-member board — including two of Buffett's kids — is well aware of his views.

"Berkshire has been run with enormous transparency, integrity, a long-term orientation, and a culture of stewardship. It is run by the greatest investor in history. That's the present," Chris Davis, an investment manager and Berkshire board member, told Barron's last year . "As for the future, every activist and investment banker will argue that in a world without Warren and Charlie, Berkshire's unorthodox structure shouldn't persist. I think it's worth defending."

Whatever the questions, Berkshire shareholders will savor the annual meeting, knowing there may not be many more with Buffett at the helm. As for the stock, many may heed the advice of Munger, who said that "they should keep the faith" rather than sell after he and Buffett are gone.

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Yes, I've long wanted to see a study of how Buffett's discards perform.

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Bar, Those allegations against Globe Life do sound serious. The stock is staging a nice recovery, but still down by 1/3 or so. I guess the moral of the story is that when Buffett exits a stock completely, it's probably best to follow his lead. But there are a bunch of stocks that Buffett sold out of last year that I decided to keep for the longer term --> DHI, GL, MKL, MMC, JNJ, MDLZ, PG. So far only GL has blown up, but luckily only a small position. Still unnerving to watch though.


>>> Globe Life profit surges on strong underwriting, investment returns


Reuters

Apr 22, 2024


https://finance.yahoo.com/news/globe-life-profit-surges-strong-210636532.html


April 22 (Reuters) - Globe Life posted a rise in first-quarter profit on Monday as the insurer benefited from strong investment returns and underwriting activities.

The insurance industry, known for its resilience to economic downturns, sustains a stable demand for policies, with both corporate and government spending on insurance remaining steady.

Total premiums at Globe Life rose to $1.15 billion in the first quarter from $1.10 billion a year ago.

The surge in the broader equity capital markets on the other hand has enhanced investment income for insurers, who diversify a portion of their cash across various asset classes.

Globe Life's net investment income for the quarter increased about 10% to $282.6 million.

The company's net operating income for the three months ended March 31 came in at $2.78 per share, compared with $2.53 per share in the prior-year quarter.

Globe Life expects its operating income for the year to be between $11.50 to $12.00 per share. The insurer further expects to resume share buybacks once the blackout period related to a potential acquisition ends for the first quarter.

Earlier this month, Fuzzy Panda Research disclosed a short position in the company, citing numerous cases of insurance fraud, leading Globe Life's shares to drop to their lowest in over a decade.

Globe Life denied the allegations, saying "the short seller analysis by Fuzzy Panda Research mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false."

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Globe Life is a mess. Several there will be going to prison.

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>>> Billionaire Warren Buffett Recently Cut This Stock From Berkshire Hathaway's Portfolio. It Just Dropped 53% In 1 Day. Here's What Investors Need to Know.


by Courtney Carlsen

Motley Fool

Apr 17, 2024


https://finance.yahoo.com/news/billionaire-warren-buffett-recently-cut-101500983.html


Globe Life (NYSE: GL) stock plummeted by more than 53% in a single day last week after short-seller Fuzzy Panda Research accused the life insurance company of fraud. The claims piled onto the already struggling stock, which had previously been a longtime holding of Warren Buffett's conglomerate, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B).

If you're thinking about buying the dip in the stock, there are some things you'll want to know.

Globe Life's troubles began last year

Globe Life was one of Berkshire Hathaway's longest-held investments, having been part of the conglomerate's portfolio for more than two decades. Berkshire held Globe Life through several difficult economic periods, including the COVID-19 pandemic, which put tremendous pressure on life insurers by elevating claims costs.

Buffett examines a management team's character and trustworthiness when investing. Buffett and his team have an excellent track record of evaluating management, which is a big reason for the conglomerate's long-term success. When Globe Life became the subject of several lawsuits accusing it of misconduct, Berkshire pulled the plug on its investment.

Last year, two Globe Life subsidiaries, American Income Life Insurance Co. and Arias Agencies, faced a lawsuit accusing them of inappropriate workplace conduct; this included rampant drug use, sexual abuse, and degradation of agents who didn't hit sales targets.

Globe Life's struggles continued when a former executive claimed he was fired for blowing the whistle on "potentially illegal" sales practices at the subsidiary. It appears that the accusations were why Berkshire sold its stake in the insurer last year.

Here's what short seller Fuzzy Panda had to say about the insurer

Fast-forward to this year, and Globe Life's troubles have gone from bad to worse. On March 6, the U.S. Department of Justice issued subpoenas to Globe Life and American Income Life. The subpoena is part of an investigation into allegations of fraud and misconduct at the (renamed) Arias Organization, now one of American Income Life's agencies.

Last week, the dam broke after short-seller Fuzzy Panda Research accused Globe Life of "extensive" insurance fraud that was ignored by management. According to Breakout Point and reported by Bloomberg, Fuzzy Panda Research was the best-performing active short-seller in 2023. Although short-sellers -- investors who try to profit from falling share prices -- suffered deep losses during the long bull market of the 2010s, they can help expose harmful or downright fraudulent business practices.

Fuzzy Panda reviewed hundreds of court documents and interviewed former executives and agents "who showed us where the fraud was hidden." According to the short-seller, the fraud was ignored by management despite being "obvious and reported hundreds of times." After the short report was released, Globe Life's stock plummeted 53% in a single day.

Following the serious accusations from Fuzzy Panda, Globe Life responded by saying:

We reviewed the report and found it to be wildly misleading, mixing anonymous allegations with recycled points pushed by plaintiff law firms to coerce Globe Life into settlements ... The short seller analysis by Fuzzy Panda Research mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false, misleading and defamatory.

Buy the dip?

According to The Fly, analysts believe the stock sell-off is overdone, but big question marks remain. Investment bank and investment firm Piper Sandler said that Globe Life's response "serves to assuage concerns but does not completely remove the vacuum that remains absent a broader communication about this matter with the investment community."

Another investment firm, Evercore, meanwhile, sees limited downside from here but says there is still "significant uncertainty for the shares."

Globe Life faces serious allegations, and the stock price reflects this. After its significant sell-off, aggressive investors may find the stock ripe for the picking. If you're willing to tolerate this risk, though, don't bet more than you're willing to lose.

However, given the uncertainty around the situation and the Department of Justice's investigation, most investors are better off waiting to see how things shake out; they should avoid the stock for now.

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