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UBS: Berkshire Hathaway shares 'attractive' in an uncertain economic environment
By: Investing.com | August 7, 2023
Berkshire Hathaway (NYSE:BRKb) shares represent an attractive play in an uncertain macro environment, analysts at UBS said Monday, following the release of second quarter results from Warren Buffett's massive conglomerate.
In a note to clients, the analysts raised their price target for Berkshire Hathaway class B shares to $414 from $405, adding that they believe the stock trades at around an 11% discount to its intrinsic value. The UBS analysts also raised their price target for Berkshire's Class A (NYSE:BRKa) shares to $621,591 from $608,000.
The announcement comes after Berkshire reported a 6.6% increase in operating earnings to $10.04 billion, thanks in large part to strength in insurance underwriting and net interest income. A recent spike in interest rates by the Federal Reserve has benefited premiums on insurance policies, which have in turn helped fund Berkshire's various investments.
Buffett told CNBC after the earnings that Berkshire would continue to purchase short-term Treasuries despite an unexpected downgrade of the U.S. credit rating last week by ratings agency Fitch. Berkshire has bought this government debt to cover catastrophic insurance losses and fuel the firm's reserves for potential acquisitions.
Berkshire's cash pile grew to almost $147.38B as of the final day of June, approaching a record high of $149B.
The Omaha-based company posted a net profit of $35.9B during the April to June period, rebounding from a loss of $43.6B in the corresponding timeframe last year. Some of the uptick reflects an almost $26B unrealized gain from its stake in Apple (NASDAQ:AAPL) that was sparked by an almost 18% surge in the tech giant's shares in the quarter.
Meanwhile, Berkshire pulled back spending on share buybacks to $1.4B, down from $4.4B in the first three months of 2023.
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On BRK NOT paying dividends: "It's almost like Buffett knows what he's doing." An interesting discussion and mostly from CFAs, CEPAs and MBAs
https://www.linkedin.com/posts/brianferoldi_warren-buffett-refuses-to-pay-a-dividend-activity-6998661486751449088-Hodb/
Warren Buffett and Berkshire Hathaway's $BRK.B equity portfolio is worth $353.4 Billion as of the end of Q2 up from $308.8B at the start of the year
By: Evan | August 5, 2023
• Warren Buffett and Berkshire Hathaway's $BRK.B equity portfolio is worth $353.4 Billion as of the end of Q2 up from $308.8B at the start of the year
Largest holdings
Apple $AAPL: $177.6B
BofA $BAC: $29.6B
American Express $AXP: $26.4B
Coca-Cola $KO: $24.1B
Chevron $CVX: $19.4B
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Here's how much cash Warren Buffett and Berkshire Hathaway $BRK.B have had every Q2 since 1992
By: Evan | August 5, 2023
• Here's how much cash Warren Buffett and Berkshire Hathaway $BRK.B have had every Q2 since 1992
1992: $542.7M
1993: $1.1B
1994: $296.5M
1995: $1B
1996: $891.1M
1997: $1.1B
1998: $7.1B
1999: $5.3B
2000: $35.6B
2001: $40.3B
2002: $46B
2003: $38.2B
2004: $47.7B
2005: $47.8B
2006: $42.1B
2007: $47B
2008: $31.1B
2009: $24.5B
2010: $28B
2011: $47.9B
2012: $40.7B
2013: $64.5B
2014: $84.6B
2015: $93.8B
2016: $96.4B
2017: $99.8B
2018: $111.1B
2019: $122.4B
2020: $146.6B
2021: $144.1B
2022: $105.4B
2023: $147.4B
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Berkshire posts record operating profit, $35.9 billion of net income
By: Investing.com | August 4, 2023
(Reuters) -Berkshire Hathaway on Saturday posted its highest ever quarterly operating profit, while gains from stock holdings helped the conglomerate led by billionaire Warren Buffett swing to a nearly $36 billion overall profit.
Rising interest rates, as well as a rebound in performance at the Geico car insurer, allowed Berkshire's insurance businesses to generate more money, with profit up 38% from a year earlier.
But those same rising interest rates have made it more costly to buy and renovate homes, hurting results at the Clayton Homes mobile home and building products businesses, and causing revenue at the RV unit Forest River to sink 34%.
The BNSF railroad, one of Berkshire's largest businesses, saw profit drop 24%, hurt by lower shipments of consumer goods, price competition from truckers, and higher pay for employees.
Investors closely watch Berkshire because of Buffett's reputation, and because results from the Omaha, Nebraska-based company's dozens of operating units often mirror broader economic trends.
Those units also include Berkshire's namesake energy company, several industrial companies, and familiar brands such as Dairy Queen, Duracell, Fruit of the Loom and See's Candies.
Quarterly operating profit topped $10 billion for the first time but grew just 7%, in part from recent purchases of the Alleghany (NYSE:Y) insurer and Pilot truck stop operator.
WARY OF VALUATIONS
And while Berkshire repurchased $1.4 billion of stock in the quarter, it remained a big net seller of stocks from its $353 billion equity portfolio - about half of which is Apple (NASDAQ:AAPL) - shedding about $8 billion more stocks than it bought.
Berkshire ended June with a near-record $147.4 billion of cash.
"They're not loving valuations," said Cathy Seifert, a CFRA Research analyst with a "hold" rating on Berkshire.
"The quarter was strong, but organic growth trends are not that robust," Seifert added. "The question that will be on investors' minds is how to position the company for strong growth without more frequent acquisitions."
Second-quarter operating profit rose to $10.04 billion, or about $6,938 per Class A share, from $9.42 billion a year earlier.
Net income totaled $35.91 billion, or $24,775 per Class A share, compared with a year-earlier $43.62 billion loss.
Year-earlier results reflected an accounting change for some insurance contracts.
Current results included $25.9 billion of largely unrealized gains from investments and derivatives.
Those results are volatile because accounting rules require Berkshire to report unrealized gains even if it sells nothing. Buffett urges investors to ignore the fluctuations.
The quarter was the first to fully include results from Pilot, in which Berkshire now owns an 80% stake. Pilot added $114 million to operating profit.
Results also included profit attributable to Berkshire's 25.3% stake in Occidental Petroleum (NYSE:OXY).
Berkshire also owns $8.8 billion of Occidental preferred stock, which throws off an 8% dividend, though the oil company has been redeeming some of the original $10 billion it issued.
WILDFIRE LOSSES
Geico posted a $514 million pre-tax underwriting profit, its second straight profitable quarter after six quarters of losses, as higher average premiums, fewer accidents and less ad spending offset a decline in policies-in-force.
Overall profit from Berkshire Hathaway (NYSE:BRKa) Energy, in which Berkshire has a 92% stake, was little changed at $785 million.
But the company said its PacifiCorp electric utility unit could suffer $1.02 billion of pre-tax losses, or $608 million not covered by insurance, tied to wildfires in 2020.
An Oregon jury in June found PacifiCorp liable to homeowners for negligence after failing to shut down power lines that caused four fires there. PacifiCorp plans an appeal.
Buffett turns 93 on August 30. He is worth $117.5 billion and the world's sixth-richest person, Forbes magazine said.
Berkshire Class A shares closed Friday at $533,600, about 2% below their record high. The shares are up 14% this year, while the Standard & Poor's 500 is up 17%.
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Buffett has overseen a roughly 4,300,000% gain in Berkshire stock during his career.
In honor of a new all-time high close, our Chart of the Day belongs to Warren Buffett’s Berkshire Hathaway $BRK.A
By: Barchart | August 4, 2023
• In honor of a new all-time high close, our Chart of the Day belongs to Warren Buffett’s Berkshire Hathaway $BRK.A
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A rare glimpse into BRK T-holdings;
:He added that "the only question for next Monday is whether we will buy $10 billion in 3-month or 6-month" T-bills. Buffett, speaking to CNBC's Becky Quick in an interview, said there are "some things people shouldn't worry about" and that "this is one."
https://www.investing.com/news/stock-market-news/warren-buffetts-berkshire-hathaway-buying-us-treasurys-not-worried-about-us-credit-rating-downgrade-432SI-3143887
Warren Buffett's Berkshire Hathaway buying U.S. Treasurys, not worried about U.S. credit rating downgrade
By: Investing.com | August 3, 2023
Legendary investor Warren Buffett told CNBC on Thursday that his conglomerate Berkshire Hathaway (NYSE:BRKa) "bought $10 billion in US Treasurys last Monday."
Buffett revealed they also bought $10 billion in Treasurys this Monday, shrugging off Fitch's U.S. credit rating downgrade.
He added that "the only question for next Monday is whether we will buy $10 billion in 3-month or 6-month" T-bills. Buffett, speaking to CNBC's Becky Quick in an interview, said there are "some things people shouldn't worry about" and that "this is one."
Fitch downgraded its long-term foreign currency issuer default rating for the U.S. to AA+ from AAA on Tuesday, based on the "expected fiscal deterioration over the next three years," as well as increasing debt.
The move resulted in U.S. equities falling, but Buffett told CNBC that while the concerns are valid, it will not change his stance on U.S. Treasurys and the U.S. dollar, which is "the reserve currency of the world, and everybody knows it," he said.
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BHE used to be a part of Kiewit, which was headed by Buffett's close friend Walter Scott who at on the BRK Board, etc. But it has grown immeasurable since it was acquired by BRK.
And WB and BRK, via BHE, have been doubling down on the energy sector of late, including via acquisitions.
the Japanese trading houses have been tremendous investments for BRK.
BRK's 5 Japanese trading houses appreciating and paying fat dividends. Have no idea how the Yen's value against the buck would have figured in an investment in them. Those were rare cases where I had thought about taking a flyer. The strongest of the bunch, MSBHF, is up about 59% YTD, or slightly less since Buffett's involvement was publicized. 2nd number below was the market cap.
Itochu Corp (ITOCY) - 47 Bil, 3.1%
Marubeni Corp (MARUY) - 24 Bil, 4.2%
Mitsubishi (MSBHF) - 53 Bil, 4.3%
Mitsui & Co (MITSY) - 47 Bil, 3.1%
Sumitomo (SSUMY) - 23 Bil, 5.3%
Berkshire Hathaway's Energy Profits Over The Years
By: Cheddar Flow | July 25, 2023
• Berkshire Hathaway's Energy Profits Over The Years.
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Berkshire Hathaway Inc. is using this year’s dip in commodity prices to load up on some of Buffett’s favorite oil and gas investments, showing that history’s most famous investor sees opportunity in a sector long disfavored due to its volatility and effects on the climate
By: Cheddar Flow | July 25, 2023
• Berkshire Hathaway Inc. is using this year’s dip in commodity prices to load up on some of Buffett’s favorite oil and gas investments, showing that history’s most famous investor sees opportunity in a sector long disfavored due to its volatility and effects on the climate. --Bloomberg
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Berkshire Hathaway cuts stake in Activision to 1.9% from 6.7%
By: Investing.com | July 17, 2023
Warren Buffett's Berkshire Hathaway (NYSE:BRKa) cut its passive stake in Activision to 1.9% from 6.7% previously, according to a regulatory filing Monday.
Berkshire Hathaway (NYSE:BRKb) held a 1.9% stake in Activision as of Jun. 30, down from 6.7% as of Dec. 31, 2022, the company reported in a regulatory filing with Securities and Exchange Commission.
The report comes just as Microsoft (NASDAQ:MSFT) inched closer to wrapping up its $69 billion dollar acquisition of Call of Duty game maker Activision.
The Federal Trade Commission lost its appeal to pause the deal on antitrust grounds. The competition watchdog filed the appeal after a Federal judge last week rejected its request to delay the acquisition, citing a lack of evidence that the deal would lessen competition.
Activision Blizzard Inc (NASDAQ:ATVI) ended the day up more than 3%.
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Yep. Great stuff! And BRK is going to pocket a $1 Billion+ profit on its Activision Blizzard stake.
Vitesse Energy - >>> Warren Buffett's Bold Move: Acquiring a 10% Dividend Yield Stock
Motley Fool
By Lee Samaha
May 27, 2023
https://www.fool.com/investing/2023/05/27/warren-buffetts-bold-move-acquiring-a-10-dividend/
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https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172185659
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>>> Buffett Takes Control of US LNG Plant With $3.3 Billion Deal
Bloomberg
by Ruth Liao
July 10, 2023
https://finance.yahoo.com/news/buffett-takes-control-us-lng-211309707.html
(Bloomberg) -- Berkshire Hathaway Energy agreed to buy Dominion Energy Inc.’s stake in a Maryland liquefied natural gas export project for $3.3 billion.
The deal will boost the company’s limited partnership ownership of the terminal to 75%, while a unit of Brookfield Infrastructure Partners holds the remaining 25%, Warren Buffett’s Berkshire said in a statement Monday.
Berkshire Hathaway Inc. first took a stake in the one-train export plant with an annual export capacity of 5.25 million tons in 2020.
The deal will give Berkshire control of one of just seven operational US facilities that can export LNG at a time when the fuel has assumed an increased economic and geopolitical significance. Natural gas prices surged in 2022 following the invasion of Ukraine, and US exports of the liquefied form of the fuel helped to sustain Western European economies after Russia cut supplies.
Cove Point LNG is contracted on a long-term basis to companies including Tokyo Gas Co. and Sumitomo Corp.
Dominion said in a separate statement that it will use the proceeds to repay debt. Dominion, which has been conducting a business review, has said it plans to host an investor day in the third quarter to give an updated strategic and financial outlook.
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Warren Buffett and Berkshire Hathaway's $BRK.B stock performance each full year since 1997
By: Evan | July 9, 2023
• Warren Buffett and Berkshire Hathaway's $BRK.B stock performance each full year since 1997.
1997: +38.4%
1998: +52.7%
1999: -22.1%
2000: +28.6%
2001: +7.3%
2002: -4%
2003: +16.2%
2004: +4.3%
2005: -0.02%
2006: +24.9%
2007: +29.2%
2008: -32.1%
2009: +2.2%
2010: +21.9%
2011: -4.8%
2012: +17.6%
2013: +32.2%
2014: +26.6%
2015: -12.1%
2016: +23.4%
2017: +21.6%
2018: +3%
2019: +10.9%
2020: +2.4%
2021: +29%
2022: +3.3%
2023: +10.4%
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Occidental Petroleum Insider Trading Alert: Warren Buffett bought an additional 2.1 million shares of $OXY worth approximately $120 million over the past few days according to a Wednesday filing
By: Barchart | June 29, 2023
• Occidental Petroleum Insider Trading Alert
Warren Buffett bought an additional 2.1 million shares of $OXY worth approximately $120 million over the past few days according to a Wednesday filing.
This brings Berkshire Hathaway's total stake in the company to just over 25%.
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Warren Buffet's Top 10 Portfolio Holdings
By: Barchart | June 28, 2023
• Warren Buffet's Top 10 Portfolio Holdings
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Warren Buffett and Berkshire Hathaway’s $BRK.B most recent portfolio update (End of Q1)
By: Savvy Trader | June 27, 2023
• Here’s Warren Buffett and Berkshire Hathaway’s $BRK.B most recent portfolio update (End of Q1)
What do you think Buffett did during Q2?
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>>> Warren Buffett's charitable giving tops $51 billion
Reuters
By Jonathan Stempel
June 22. 2023
https://www.msn.com/en-us/news/other/warren-buffett-s-charitable-giving-tops-51-billion/ar-AA1cTcZF?OCID=ansmsnnews11
(Reuters) - Warren Buffett has donated another $4.64 billion of Berkshire Hathaway stock to five charities, boosting his total giving since 2006 to more than $51 billion.
The annual donation made on Wednesday is the 92-year-old Buffett's largest, and consisted of about 13.7 million of Berkshire's Class B shares.
Buffett is donating 10.45 million shares to the Bill & Melinda Gates Foundation, which has received more than $39 billion of Berkshire stock overall.
He is also donating 1.05 million shares to the Susan Thompson Buffett Foundation, named for his late first wife, and 2.2 million shares split evenly among charities led by his children Howard, Susan and Peter: the Howard G. Buffett Foundation, the Sherwood Foundation and the NoVo Foundation.
Buffett is gradually giving away nearly all of the fortune he built at Omaha, Nebraska-based Berkshire, which he has run since 1965.
He and Bill Gates also pioneered the Giving Pledge, in which more than 240 people like Michael Bloomberg, Larry Ellison, Carl Icahn, Elon Musk and Mark Zuckerberg committed at least half of their wealth to philanthropy.
Buffett has already donated more than half of his Berkshire stock. He still owned more than $112.5 billion, or about 15%, of Berkshire shares following Wednesday's donations.
"Nothing extraordinary has occurred at Berkshire: a very long runway, simple and generally sound decisions, the American tailwind and compounding effects produced my current wealth," Buffett said in a statement.
"American tailwind" was coined by Buffett in 2019 to describe the United States' ability to build wealth over the long term, even through times of war and financial crisis.
Buffett built Berkshire into an approximately $740 billion company through businesses such as the BNSF railroad and Geico car insurance, and stocks such as Apple Inc.
The Susan Thompson Buffett Foundation works in reproductive health. The Howard G. Buffett Foundation focuses on alleviating hunger, mitigating conflicts and improving public safety. The Sherwood Foundation supports nonprofits in Nebraska, and the NoVo Foundation has initiatives focused on girls and women.
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>>> Warren Buffett's Late-Night Phone Call In 2008 May Have Sparked The Most Successful Yet Hated Program In The 'History of Mankind' – And Saved The Economy
Benzinga
by Jeannine Mancini
June 21, 2023
https://finance.yahoo.com/news/warren-buffetts-night-phone-call-190023046.html
In the midst of the financial crisis in October 2008, Berkshire Hathaway Inc. CEO Warren Buffett made a significant late-night phone call to the then-Treasury Secretary Henry "Hank" Paulson. Buffett aimed to share an idea that could potentially revive the struggling economy.
Paulson, exhausted from a long night of collaborating with his team on policy ideas to restore confidence in Wall Street, recalls his weariness during that period. He shares his experience in the documentary "Panic: The Untold Story of the 2008 Financial Crisis." The documentary features interviews with notable figures, including former Presidents Barack Obama and George W. Bush, providing insights from both the government and private-sector perspectives.
During this time, Congress had recently passed the Emergency Economic Stabilization Act, also known as the "bailout bill," along with the establishment of the $700 billion Troubled Assets Relief Program (TARP) to acquire assets from failing banks. Despite these measures, investor concerns remained unabated.
"While we were getting this legislation in Congress, the situation worsened," Paulson said. "We had the two biggest bank failures in U.S. history with Wachovia and Washington Mutual. We needed something that was going to work much quicker and be more powerful."
Buffett’s Proposal
Amidst the frantic search for an effective solution, Buffett reached out to Paulson with his proposal.
Initially caught off guard by the unexpected call and not recognizing the voice on the other end, Paulson humorously recalls his confusion, remarking, "My mom has a handyman named Warren. I’m saying, ‘Why is he calling me?'"
As Paulson gathered his bearings, he listened to Buffett's suggestion, acknowledging that it held the essence of what would eventually be implemented.
Buffett recalls saying, "It might make more sense to put more capital in the banks than it would to try and buy these assets."
Following Buffett's suggestion, a meeting was convened on Oct. 13, bringing together prominent bank CEOs such as John Mack of Morgan Stanley, Jamie Dimon of J.P. Morgan Chase & Co., Lloyd Blankfein of Goldman Sachs, John Thain of Merrill Lynch, and Vikram Pandit of Citigroup. The objective was to discuss the proposal at the Treasury.
While not all banks required immediate assistance, some CEOs expressed reluctance to accept cash injections, fearing it would indicate financial struggles and potentially lead to investor withdrawals. Nevertheless, Paulson stressed the crucial nature of the bailout to restore economic faith, eventually garnering unanimous agreement.
Mack recalls thinking, "Look, if I get lucky, my board will fire me, and I'll get out of all this craziness."
The outcome of the meeting resulted in the Treasury injecting $250 billion into the banking system using funds from TARP.
Public Perception
The bailout's reception varied. Protesters took to the streets, expressing disapproval that taxpayer money was used to rescue wealthy Wall Street investors who, in the eyes of many, caused the crisis through their poor judgment.
"I think there are still many people who believe that we bailed out companies and helped Wall Street because we were trying to help our friends in the financial industry and not out of our interest in defending the U.S. economy," former Federal Reserve Chair Ben Bernanke said.
Paulson, Bernanke and New York Fed President Timothy Geithner emphasize that their actions were intended to aid Main Street by rescuing Wall Street. While admitting to imperfections in their crisis management, such as the inability to save Lehman Brothers from collapse, they stand by their decision to infuse funds into the economy through the banking sector.
Paulson highlights the steady recovery of the market and indexes like the S&P 500 since 2009, dubbing the bailout "the most successful program that is broadly hated in the history of mankind."
Echoing this sentiment, Bush believes it to be "probably the greatest financial bailout ever," even though he acknowledges the inability to provide irrefutable evidence, firmly believing that the intervention likely averted a severe depression.
A decade later in 2018, Buffett stated that another financial crisis is inevitable because of the same fundamental human traits — jealousy and greed — that contributed to the previous one 10 years ago. "That's a permanent part of the system," he said.
In March, a series of small to mid-size U.S. bank failures sent shockwaves through the global banking sector, resulting in a rapid decline in bank stock prices. Swift action by regulators aimed to prevent potential worldwide contagion. Buffett commended the government's intervention, emphasizing its role in averting a more significant crisis.
Buffett expressed little surprise at the banks' failures, attributing them to the growing complexity of the U.S. banking system. He revealed that he had been gradually divesting his holdings in bank stocks, beginning at the onset of the pandemic and continuing over the past six months. He cited increasing mismanagement within banks and their responses to flawed incentives as factors driving his decision.
"The American public doesn't understand their banking system — and some people in Congress don’t understand it any more than I understand it," Buffett said, highlighting the widespread lack of comprehension surrounding the intricacies of the banking industry.
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"Berkshire Raises Stakes in 5 Japanese Trading Firms to 8.5%."
"Berkshire Hathaway BRK.B –0.44% has boosted stake in five Japanese trading companies to an average of 8.5% and Berkshire said it hopes to increase those interests"
https://www.barrons.com/articles/berkshire-raises-its-stakes-in-5-japanese-trading-firms-to-8-5-188e0d15?siteid=yhoof2"
How Warren Buffett and Berkshire Hathaway make their money
By: Evan | June 2, 2023
• How Warren Buffett and Berkshire Hathaway make their money.
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Berkshire Hathaway buys 4.66M more $OXY occidental shares for over $270 million
By: Cheddar Flow | May 30, 2023
• Berkshire Hathaway buys 4.66M more $OXY occidental shares for over $270 million.
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How Warren Buffett and Berkshire Hathaway's $BRK.B largest holdings have performed so far in 2023
By: Savvy Trader | May 25, 2023
• How Warren Buffett and Berkshire Hathaway's $BRK.B largest holdings have performed so far in 2023
Apple $AAPL +32.6%
$BAC -15.4%
Coca-Cola $KO -5.1%
American Express $AXP +1.8%
Chevron $CVX -14.3%
Kraft $KHC -6.1%
Occidental $OXY -7.1%
Moody's $MCO +11.1%
Activision $ATVI +0.4%
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Warren Buffett and Berkshire Hathaway's $BRK.B portfolio at the end of Q1 2023 vs at the end of Q4 2022
By: Evan | May 24, 2023
• Warren Buffett and Berkshire Hathaway's $BRK.B portfolio at the end of Q1 2023 vs at the end of Q4 2022.
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Berkshire Hathaway boosts stake in Occidental Petroleum (OXY) to 24.4%
By: Jonathan Stempel | May 18, 2023
(Reuters) - Berkshire Hathaway (NYSE:BRKa) Inc said on Thursday it had acquired more shares of Occidental Petroleum Corp (NYSE:OXY), boosting its stake in the oil company to 24.4%.
In a regulatory filing, the conglomerate controlled by billionaire Warren Buffett said it paid about $201 million for 3.46 million Occidental shares between May 16 and 18.
Berkshire has bought Occidental shares on each of the last six trading days, paying about $327 million for 5.62 million shares.
It now owns about 217.3 million Occidental shares worth about $12.7 billion.
Berkshire also owns approximately $9.5 billion of Occidental preferred stock carrying an 8% annual dividend, plus warrants to buy $5 billion of Occidental common shares at $59.62 each.
Occidental's share price closed Thursday down 67 cents at $58.25.
Berkshire acquired the preferred stock and warrants in 2019 when it helped finance Houston-based Occidental's purchase of Anadarko Petroleum Corp (NYSE:APC).
It began buying common shares early last year, around when Russia invaded Ukraine and as oil prices rose.
At Berkshire's annual shareholder meeting on May 6, Buffett pointed out Occidental's presence in the Permian Basin, which accounts for a significant amount of U.S. crude production, and called Occidental CEO Vicki Hollub an "extraordinary manager."
He also tried to end speculation that Berkshire might buy Occidental and further diversify its own energy portfolio.
"We're not going to buy control," he said. "We've got the right management running it... we wouldn't know what to do with it."
Berkshire had amassed a 22.6% stake in the BNSF railroad before paying $26.5 billion for the remainder in 2010.
Buffett, 92, has run Berkshire since 1965.
The Omaha, Nebraska-based company owns dozens of businesses, including Geico car insurance and many retail and manufacturing companies, as well as stocks such as Apple Inc (NASDAQ:AAPL).
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RH [restoration hardware] stock plunges 8% after Berkshire Hathaway dumps entire stake in the home furnishings company
* "RH stock price plunged 8% on Tuesday after Warren Buffett's Berkshire Hathaway sold its entire stake in the home furnishings company.
* Berkshire Hathaway began building its RH stake in the third quarter of 2019, and it was last worth about $575 million.
* Shares of RH have plunged 67% from their post-pandemic high, but Buffett still likely made a profit on the company."
https://finance.yahoo.com/news/rh-stock-plunges-8-warren-013518186.html
Berkshire Hathaway buys an additional 2.165 million shares Occidental Petroleum $OXY worth more than $125 million
By: Barchart | May 16, 2023
• Insider Trading Alert: Occidental Petroleum $OXY
Warren Buffett's Berkshire Hathaway buys an additional 2.165 million shares worth more than $125 million. As we said in the tweet below, he loves this price range.
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Berkshire invests in Capital One, sheds four stocks
By: Investing.com | May 15, 2023
(Reuters) -Berkshire Hathaway Inc on Monday disclosed it has begun investing in Capital One Financial Corp (NYSE:COF) while exiting investments in four other stocks, as the company run by Warren Buffett cut back its exposure to equities.
Buffett's company made its disclosures in a regulatory filing listing its U.S.-traded stocks as of March 31.
Capital One shares rose 5.7% in after-hours trading following Berkshire's disclosure of a 9.92 million share stake worth about $954 million.
The McLean, Virginia-based bank did not immediately respond to requests for comment.
In Monday's filing, Berkshire also revealed a new $41.3 million stake in Diageo (LON:DGE) Plc, the maker of alcoholic beverages including Johnnie Walker and Guinness.
Berkshire also shed its holdings in Bank of New York Mellon (NYSE:BK) Corp and US Bancorp (NYSE:USB), as well as Taiwanese chipmaker TSMC and furniture chain RH (NYSE:RH).
Buffett's company was a net seller of stocks in the quarter, buying $2.87 billion and selling $13.28 billion as it devoted resources elsewhere, including $8.2 billion to boost its stake in truck stop operator Pilot Travel Centers to 80% from 38.6%.
Close to half of its stock sales were in Chevron Corp (NYSE:CVX), though Berkshire still owns a 23.7% stake in another oil company, Occidental Petroleum Corp (NYSE:OXY).
The Omaha, Nebraska-based conglomerate ended March with $130.6 billion of cash and equivalents.
Monday's filing does not say which investments are Buffett's and which are from his portfolio managers Todd Combs and Ted Weschler, though larger investments are usually Buffett's.
Investors often try to piggyback on Berkshire's moves, reflecting Buffett's reputation.
BERKSHIRE BUYS MORE APPLE, BANK OF AMERICA
Despite the selling, Berkshire still invests in several financial services companies.
These include Bank of America Corp (NYSE:BAC) and American Express (NYSE:AXP) Corp, where Berkshire's respective $29.5 billion and $25 billion stakes make them its largest stock holdings other than a $151 billion stake in Apple Inc (NASDAQ:AAPL).
Berkshire bought more Apple and Bank of America shares in the quarter.
"Trust banks such as BNY Mellon have seen deposit pressures mounting as the [U.S. Federal Reserve shifts] to quantitative tapering," said David Smith, an analyst at Autonomous Research.
In contrast, high-yielding assets for credit card specialists such as Capital One position them better to absorb increased funding costs and avoid liquidity concerns, he added.
Berkshire also has dozens of operating businesses including the BNSF railroad, Geico car insurance, and many energy, manufacturing and consumer units.
Buffett shed what remained of the TSMC stake six months after surprising investors by revealing a $4.1 billion investment.
He told investors this month he had reevaluated the risks of investing in Taiwan, on growing concern China might soon invade or try to reclaim the island nation.
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JUST IN: Berkshire Hathaway $BRK.B bought 20.4M more shares of Apple $AAPL during Q1 bringing their total stake up to 915.6M
By: StockMKTNewz | May 15, 2023
• JUST IN:
Warren Buffett and Berkshire Hathaway $BRK.B bought 20.4M more shares of Apple $AAPL during Q1 bringing their total stake up to 915.6M
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BREAKING: Warren Buffett and Berkshire Hathaway $BRK.B Just Updated Their Portfolio
By: StockMKTNewz | May 15, 2023
• BREAKING: WARREN BUFFETT AND BERKSHIRE HATHAWAY $BRK.B JUST UPDATED THEIR PORTFOLIO
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Berkshire Hathaway Shareholder Activist Arrested After Mentioning Bill Gates’ Ties To Jeffrey Epstein
https://www.dailywire.com/news/berkshire-hathaway-shareholder-activist-arrested-after-mentioning-bill-gates-ties-to-jeffrey-epstein
Looks like a share holder has a right to be at the BRK annual meeting until he starts telling the truth.
Warren Buffett says Berkshire not planning to buy Occidental Petroleum
By: Investing.com | May 7, 2023
OMAHA, Nebraska (Reuters) - Warren Buffett said on Saturday that Berkshire Hathaway (NYSE:BRKa) Inc is not planning to acquire Occidental Petroleum Corp (NYSE:OXY) but remains happy with its large investment in the oil company.
Speaking at Berkshire's annual shareholder meeting, Buffett rejected speculation that Berkshire would buy Occidental after having accumulated a 23.6% stake.
"We will not be making any offer for Occidental," Buffett said. "We have got the right management."
Occidental did not immediately respond to a request for comment.
Analysts and investors have said an acquisition could diversify Berkshire's energy portfolio, which includes several utilities, electricity distributors and renewable power projects.
Berkshire started amassing shares of Houston-based Occidental in February 2022, around when Russia invaded Ukraine.
Buffett has also had a close relationship with Occidental CEO Vicki Hollub, who has been slashing debt and returning money to shareholders since the company bought Anadarko Petroleum Corp (NYSE:APC) in 2019.
"Hollub is an extraordinary manager at Occidental," Buffett said. "We love having Vicki run it."
Occidental and Chevron Corp (NYSE:CVX), another large Berkshire holding, also have significant presences in the Permian Basin, an area in Texas and New Mexico that accounts for a significant amount of U.S. crude production.
Berkshire ended March owning $21.6 billion of Chevron stock, though it appeared to sell about $6 billion in the first quarter, Edward Jones & Co analyst Jim Shanahan estimated.
Until recently, Berkshire also owned $10 billion of Occidental preferred stock with an 8% dividend, which helped fund the Anadarko purchase, plus warrants to buy another $5 billion of common shares at $59.62 each.
Berkshire said on Saturday that Occidental redeemed about $474 million of the preferred stock at a premium, which it had a right to do, reducing dividend payouts.
Last August, Berkshire won U.S. Federal Energy Regulatory Commission permission to buy up to 50% of Occidental's common stock.
It needed the authorization because it would have had exceeded the Federal Energy Regulatory Commission's 25% ownership limit had it exercised the warrants.
Buffett, 92, has longed for another large acquisition for his Omaha, Nebraska-based conglomerate, whose dozens of businesses include Geico car insurance and the BNSF railroad.
Berkshire had a 22.6% stake in BNSF before paying $26.5 billion for the remainder in 2010.
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Berkshire Hathaway $BRK.B currently hold $9.4 Billion worth of US Treasuries
By: StockMKTNewz | May 6, 2023
• Berkshire Hathaway $BRK.B currently hold $9.4 Billion worth of US Treasuries
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Warren Buffett and Berkshire Hathaway's $BRK.B equity portfolio is worth $328.2 Billion as of the end of Q1 up from $308.8B at the end of Q4
By: StockMKTNewz | May 6, 2023
• Warren Buffett and Berkshire Hathaway's $BRK.B equity portfolio is worth $328.2 Billion as of the end of Q1 up from $308.8B at the end of Q4
Largest holdings:
Apple $AAPL - $151B
BofA $BAC - $29.5B
American Express $AXP - $25B
Coca-Cola $KO - $24.8B
Chevron $CVX - $21.6B
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>>> Buffett's Berkshire posts $35.5 bln profit, buys back more stock
Reuters
by Jonathan Stempel
May 6, 2023
https://finance.yahoo.com/news/1-buffetts-berkshire-posts-35-130933840.html
Berkshire Hathaway Aggregate Says Fair Value Of Equity Investments In Chevron As Of Mar 31, 2023 Was $21.6 Billion Versus $30 Billion As Of Dec 31, 2022
OMAHA, Nebraska, May 6 (Reuters) - Warren Buffett's Berkshire Hathaway Inc posted a $35.5 billion first-quarter profit on Saturday, reflecting gains from stocks such as Apple Inc, while higher investment income and a rebound at car insurer Geico bolstered operating results.
Berkshire also sped up repurchases of its own stock, buying back $4.4 billion, while paring its investments in other stocks such as Chevron Corp, which is still a major holding.
Results were released ahead of Berkshire's annual shareholder meeting in Omaha, part of a weekend that draws tens of thousands of people to the city.
Buffett, 92, has run Berkshire since 1965, transforming it from a struggling textile company into a conglomerate with dozens of businesses including Geico, the BNSF railroad, Berkshire Hathaway Energy, and manufacturing and retail units including See's Candies and Dairy Queen ice cream.
The diversification has led many investors, not just Buffett fans, to view Berkshire as a stable long-term investment even amid recession fears and concerns about the banking industry.
MORE CASH
Net income equaled $24,377 per Class A share and rose from $5.58 billion, or $3,784 per share, a year earlier.
That in part reflected a 27% jump in Apple's stock price, leaving Berkshire with a $151 billion stake in the iPhone maker.
An accounting rule requires Berkshire to report unrealized gains and losses with net results, and Buffett urges investors to ignore the resulting volatility.
Quarterly operating profit increased 13% to $8.07 billion, or about $5,561 per Class A share, from $7.16 billion.
Those results benefited from Geico snapping a six-quarter string of underwriting losses, and a 68% increase in how much Berkshire's insurance units generate from investments.
Geico's pretax underwriting gain was $703 million, benefiting from higher premiums, fewer crashes and a significant drop in ad spending, which may have led to fewer high-risk drivers seeking coverage.
Berkshire's cash hoard grew $2 billion in the quarter to $130.6 billion, as the company sold $13.3 billion of stocks and bought just $2.9 billion.
Chevron appears to have been among the sales, with Berkshire's stake falling 28% to $21.6 billion though the oil company's stock price dropped just 9%.
Berkshire also owns a 23.6% stake in another oil company, Occidental Petroleum Corp.
Its stock sales more than offset the $8.2 billion Berkshire spent to boost its stake in truck stop operator Pilot Travel Centers to 80% from 38.6%, leaving the founding Haslam family with 20%. The increase was expected.
IMPACT OF WILDFIRES
Profit at the BNSF railroad fell 9% to $1.25 billion, hurt by higher fuel costs and lower shipping volumes.
Berkshire Hathaway Energy, normally a steady earnings generator, saw profit fall 46% as it set aside $359 million for legal and other costs from wildfires in Oregon and northern California, where it has multiple operations, in 2020.
Operating results also reflected October's purchase of insurance holding company Alleghany Corp, while net results included a gain related to Pilot.
Berkshire's Class A shares have risen 4.9% this year, trailing the Standard & Poor's 500's 7.7% gain. The index lagged Berkshire by 23.4 percentage points in 2022, excluding dividends.
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>>> How Apple stock became one of Warren Buffett's four 'jewels'
Yahoo Finance
by Josh Schafer
May 4, 2023
https://finance.yahoo.com/news/how-apple-stock-became-one-of-warren-buffetts-four-jewels-204336773.html
Warren Buffett's investment in Apple (AAPL) stock has quickly become the most prominent holding in Berkshire Hathaway's (BRK-A, BRK-B) $360 billion equity portfolio.
Berkshire first bought the stock in 2016, and since then Apple has grown to a $110 billion position comprising roughly 40% of Berkshire's stock holdings. Berkshire owns just under 6% of Apple.
The rapid growth has positioned the largest US public company as a fixture in Berkshire Hathaway's annual shareholder letters and Buffett's comments during annual meetings.
At Berkshire's annual shareholders meeting on Saturday, investors will eagerly await what Buffett might say about his largest holding and its new forays into augmented reality headsets, in-house computer chip creation, and expansion in India.
The meeting also comes less than 48 hours after Apple's earnings report published late Thursday, which showed better than expected iPhone sales despite a 3% revenue decline year-over-year.
Year-to-date, shares of the iPhone maker are up nearly 30%.
The four 'jewels'
In 2020, Buffett highlighted the Apple investment as one of the company’s four "jewels," along with Berkshire's insurance operations led by Ajit Jain, Berkshire's ownership of railroad BNSF, and its Berkshire Hathaway Energy subsidiary.
From shareholder returns to its brand recognition to its management team, Apple fits the bill for a Buffett bet.
Buffett has long been a believer in the benefits of share buybacks and highlighted outsized dividend payments Berkshire receives from some long-time holdings like Coca-Cola (KO) and American Express (AXP) in this year's letter to shareholders.
"Our cost for that stake was $36 billion," Buffett wrote in his 2020 annual shareholder letter about the company's investment in Apple. "Since then, we have both enjoyed regular dividends, averaging about $775 million annually, and have also — in 2020 — pocketed an additional $11 billion by selling a small portion of our position.
"Despite that sale — voila! — Berkshire now owns 5.4% of Apple. That increase was costless to us, coming about because Apple has continuously repurchased its shares, thereby substantially shrinking the number it now has outstanding." Today, Berkshire owns about 5.8% of the company.
The Oracle of Omaha, however, was patient in entering the fray on his Apple position.
Berkshire didn't place its bets on the company after the success of Apple's iPod launch in 2001 or its iPhone launch six years later. Instead, Buffett's ride with Apple has been fueled largely by growth in the company's services business.
In 2015, Apple reported annual services revenue of $19.9 billion and wearable revenue of $10.1 billion.
In 2022, those categories produced $78.1 billion and $41.2 billion, respectively.
"I just think of basically the utility of those products to a ecosystem that is demographically terrific and finds that instrument useful dozens and dozens of times a day," Buffett told Yahoo Finance in 2020. "It's almost indispensable, not only to individuals, business, I mean, everything."
More recently, Apple launched its high-yield savings account with Goldman Sachs, and at an event in September 2022 the company stressed its ambitions to integrate more deeply with healthcare tools.
And when it comes to management, Buffett has rarely been lacking for praise of Apple CEO Tim Cook.
"Tim Cook, Apple’s brilliant CEO, quite properly regards users of Apple products as his first love, but all of his other constituencies benefit from Tim’s managerial touch as well," Buffett wrote in Berkshire's 2021 letter to shareholders.
Adding at the 2021 annual shareholders meeting: "Tim Cook was underappreciated for a while. He's one of the best managers in the world. And I've seen a lot of managers. And he's got a product that people absolutely love. And there's an installed base of people, and they get satisfaction rates of 99%."
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Nice post.
"I didn’t like the banking business as well as I did before,” he said during the April 12 interview. “I just think the system isn’t set up quite right in terms of connecting punishment to culprits,” he added. “It’s incredibly important that your banking system run well.”
https://finance.yahoo.com/news/how-warren-buffett-avoided-damage-from-the-current-banking-crisis-150631786.html
>>> How Warren Buffett avoided damage from the current banking crisis
Yahoo Finance
by David Hollerith and Dan Fitzpatrick
May 5, 2023
https://finance.yahoo.com/news/how-warren-buffett-avoided-damage-from-the-current-banking-crisis-150631786.html
Warren Buffett hasn’t emerged yet as a white knight for regional banks in this current crisis. What he has done, however, is sidestep damage to Berkshire Hathaway’s portfolio.
The Oracle of Omaha sold a large portion of Berkshire’s holdings in US banks between 2020 and 2022, some just months before the banking system upheaval that began in mid March.
Berkshire exited giant stakes of JPMorgan Chase (JPM), Wells Fargo (WFC), and Goldman Sachs (GS) during the period, and it also considerably reduced its ownership in regional lender US Bancorp (USB) and custody bank Bank of New York Mellon (BK).
Berkshire still has sizable holdings in giants Bank of America (BAC) and Citigroup (C) as well as a smaller piece of online bank Ally Financial (ALLY).
“I would assume they did not think that they were going to make over the following five to ten years as much as they could by doing something else,” said Bill Smead, founder and chairman of Smead Capital Management, when asked why Berkshire exited banks when it did.
Buffett said earlier in the pandemic that he didn't want to be overexposed to the industry. He has said little on the subject this year beyond a recent interview with CNBC’s Becky Quick, where he did acknowledge reducing his exposure amid concerns that banking could run into a lot of "trouble."
“I didn’t like the banking business as well as I did before,” he said during the April 12 interview. “I just think the system isn’t set up quite right in terms of connecting punishment to culprits,” he added. “It’s incredibly important that your banking system run well.”
Buffett’s specific thoughts on the banking system will likely be front and center this weekend at the Berkshire Hathaway annual meeting, an annual Omaha, Neb. extravaganza that attracts tens of thousands of Buffett followers from around the country. The highlight of the event is a wide-ranging question-and-answer session with Buffett on Saturday.
The 92-year-old billionaire has over the decades played the role of rescuer to a number of financial institutions while also serving as an unofficial adviser to Washington officials during periods of extreme financial turmoil.
He has yet to play the role of rescuer during this crisis, at least in any way that has thus far been made public, but he may have offered some of his advice to the White House.
Reuters reported that he talked to the Biden administration in March as the banking unrest raged. When asked about those talks, he told CNBC that “I haven’t spoken to anybody that recently, but I’ve spoken with people.”
'A remarkably good business'
Buffett's complicated history with banks spans more than five decades. It started when Berkshire in 1969 bought Illinois National Bank and Trust in Rockford, Ill. Buffett eventually spun it off after a change in US banking laws made it difficult for him to own non-banking businesses at the same time.
During the 1987 market crash he invested in Wall Street investment bank Salomon Brothers, only to see that investment backfire when a bond trading scandal nearly pushed the company into bankruptcy. Buffett became chairman of the firm and ran it for nine months. He saved the company but called the experience “far from fun” in a 1992 shareholder letter.
This didn’t stop him, however, from making big bets on more traditional commercial banks that took deposits and made traditional loans. In fact, he became the largest investor in Wells Fargo, Bank of America, Bank of New York Mellon, and US Bancorp.
His Wells Fargo ownership, which started in 1989, rose as high as 13% in 1994.
“Banking has been a remarkably good business in this country,” he told shareholders at the 2003 annual meeting.
His connection to the industry deepened in 2008, when he played a key role in restoring confidence in banks during the worst financial crisis since the Great Depression. Goldman Sachs came to him seeking capital, along with his stamp of approval. Buffett injected $5 billion into Goldman.
It was also Buffett who suggested in 2008 to then-Treasury Secretary Hank Paulson that the federal government should inject capital into banks to stabilize the industry. That became an official proposal of $250 billion, even though some of the biggest banks insisted they didn’t need the money.
He played the role of rescuer again in 2011 when he injected $5 billion into Bank of America. At the time Brian Moynihan was still a relatively new chief executive and the lender's shares were under severe pressure due to losses from subprime loans.
More investments followed, including a $4 billion stake in industry giant JPMorgan Chase in 2018 and a new bet on PNC Financial Services Group (PNC), another regional lender.
He even told Yahoo Finance before the JPMorgan purchase that he should have bought the stock earlier: “I wish we bought a lot more. I made a mistake.”
'Sure, I noticed it'
But Berkshire's actions changed during the COVID-19 pandemic, as it started to unload many of those same holdings it had been amassing for years.
The most significant, perhaps, was Wells Fargo given Buffett's long-time association with the stock and the company.
At Berkshire's 2015 annual meeting, Wells Fargo even rolled its signature stagecoach down Omaha's 10th street as part of a celebration of Buffett's 50th year in charge of the conglomerate. It also parked another inside the exhibition hall where companies partly or fully owned by Berkshire displayed their goods.
Buffet began unloading the Wells position in 2018 after a series of scandals rocked the bank, including revelations that employees pressured by sales goals opened millions of accounts that customers didn't want and charged fees that weren't necessary.
He unloaded his last stakes in 2022.
Berkshire also no longer owns any of JPMorgan, Goldman, PNC and M&T Bank (MTB). All were sold during the pandemic.
The last reduction disclosed thus far in public filings came in the final quarter of 2022, when Berkshire cut its stakes in Bank of New York Mellon and US Bancorp by 69% and 95%.
Buffett didn't discuss specific banks or positions in his CNBC interview on April 12. But he did make it clear he had noticed some concerning trends in the run up to the current banking chaos.
“Accounting procedures have driven some bankers to do some things that may have helped their current earnings a little bit…and caused the recurring temptation to get a little bit bigger spread and report a little more in earnings,” he said. “And it’s ended in a result you could predict.”
“So you noticed it,” Quick said. “You saw it.”
“Sure," Buffett said. “Sure, I noticed it.”
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Berkshire Hathaway $BRK.B was up 3,787,464% from 1964 to 2022 compared to the S&P 500 which was up 24,708% in the same period
By: StockMKTNewz | May 5, 2023
• Warren Buffett's track record is very impressive to say the least ...
Berkshire Hathaway $BRK.B was up 3,787,464% from 1964 to 2022 compared to the S&P 500 which was up 24,708% in the same period
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Berkshire Hathaway Earnings Preview: Fundamentals Indicate Attractive Valuation
By: Investing.com | May 4, 2023
• Berkshire Hathaway, led by Warren Buffett, is a financial conglomerate with a focus on long-term investments.
• InvestingPro's Fair Value Index suggests that the stock has high growth potential.
• The company is set to report earnings on May 8, and barring any negative surprises, the stock has plenty of room to rally.
Warren Buffett, also known as the Oracle of Omaha, has been chairman of the US financial conglomerate Berkshire Hathaway Class A (NYSE:BRKa) since 1970.
As of 2022, it was the world's seventh-largest publicly traded company by market capitalization ($741.5 billion), with a focus on investing in companies that are expected to create value over the long term.
What makes it different from other listed companies are its two share classes: A and B. Class A is mainly held by Warren Buffett, who owns around 15% of the company, and is also one of the most expensive in the world.
Berkshire Hathaway B (NYSE:BRKb), on the other hand, has a more affordable share price and is aimed at a wider range of equity investors.
On Monday, May 8, the company will release its first quarter results, which could provide a significant boost to the stock price.
Berkshire Hathaway's earnings per share are expected to be $5.432 per share (Class A), $3.5 per share (Class B) and revenues are expected to be just over $85 billion.
Berkshire Hathaway Upcoming Earnings
Source: InvestingPro
Berkshire Hathaway’s High Growth Potential
The shares of this financial conglomerate have a high growth potential as measured by InvestingPro's Fair Value Index. For class B shares, it is currently 32.3%, with the potential for a breakout to new all-time highs.
Berkshire Hathaway’s Fair Value Index
Source: InvestingPro
From a technical point of view, the rally has slowed somewhat. We are now in the midst of a local correction. The first support levels to look out for are around $320-316.
Berkshire Hathaway Technical Analysis
The bullish scenario assumes that growth continues, with the first hurdle at the all-time high of $360.
Fundamentals Indicate Attractive Valuation
Using InvestingPro tools to compare Berkshire Hathaway with its peers based on price/earnings and price/book shows the potential for further growth.
Among the 7 companies with similar characteristics, both the P/E ratio (1.5x) and the P/B ratio (-31.3x) are the lowest.
Berkshire Hathaway Peer Comparision
Source: InvestingPro
In conclusion, if we don't see any major negative surprises in Monday's Q1 2023 report, Berkshire Hathaway's share price currently has a lot of potential for further gains based on technical and fundamental indicators.
What Does Warren Buffett’s Portfolio Look Like?
InvestingPro tools allow us to view the portfolios of the biggest players in the market. This includes Berkshire Hathway, managed by Warren Buffett.
According to the latest data (14.02.2023), the largest holdings are Apple (NASDAQ:AAPL) and Bank of America (NYSE:BAC).
Warren Buffett's Portfolio Holdings
Source: InvestingPro
Given the presence of Coca-Cola (NYSE:KO), Chevron (NYSE:CVX) and American Express (NYSE:AXP), this is a portfolio driven by a long-term strategy of value investing through large and established brands in the market.
Using InvestingPro to look at the performance over the last 5 years, a clear increase in the value of the portfolio (+58.25%) is evident. Despite a poor 2022 for equities, the portfolio did not lose much.
Warren Buffet’s Portfolio Performance Over the Last 5 Years
Source: InvestingPro
So What Can We Expect in the Second Half of 2023?
A lot will depend on what the Fed does. The stock market could get a boost if it starts a cycle of rate cuts. It's also worth keeping an eye on the increasing involvement of conglomerates in the Japanese market.
The shares of Japanese giants Mitsubishi Corp. (TYO:8058), Mitsui & Co. (TYO:8031), Itochu Corp. (TYO:8001), Marubeni Corp. (TYO:8002), and Sumitomo (TYO:8316) have risen to 7.4% in recent months.
In the meantime, here is the link for those of you who would like to subscribe to InvestingPro and start analyzing stocks yourself.
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Warren Buffett's Berkshire Hathaway $BRK.B is about to receive a dividend check from Apple $AAPL worth more than $210 Million
By: StockMKTNewz | May 4, 2023
• Warren Buffett's Berkshire Hathaway $BRK.B is about to receive a dividend check from Apple $AAPL worth more than $210 Million
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>>> Why Warren Buffett keeps buying Occidental Petroleum — 'Nothing but sense'
Yahoo Finance
by Ines Ferré and Josh Schafer
May 3, 2023
https://finance.yahoo.com/news/why-warren-buffett-keeps-buying-occidental-petroleum--nothing-but-sense-153953363.html
Warren Buffett hasn't said much about Occidental Petroleum (OXY) in recent months.
But Berkshire Hathaway's (BRK-A, BRK-B) actions have indicated plenty.
The conglomerate has continued its steady buying of the Houston-based oil and gas explorer with its stake currently standing at 23.6% of the company.
And when the "Oracle of Omaha" takes the stage to address shareholders at Berkshire's annual meeting on Saturday, investors will be focused on not only what he says about energy, but also on whether Occidental will become the company's latest outright purchase.
Asked about his investment at last year's meeting, Buffett said, "What [Occidental CEO] Vicki Hollub was saying made nothing but sense... And I decided that it was a good place to put Berkshire's money."
Buying an oil stock isn't an outlier for Buffett and his team. According to Berkshire's most recent 13F filing, Chevron (CVX) was Berkshire's third largest holding at the end of last year, with the company's position valued at more than $29 billion at today's prices.
Occidental has quickly risen into the top 10 on that list, too, with Berkshire's stake valued at $12.7 billion.
“There are some characteristics of this [Occidental] investment that are consistent with what we've seen historically from Warren Buffett. That it's a value name,” James Shanahan, equity analyst at Edward Jones, told Yahoo Finance.
"It fits this other criteria too, where he likes that the business generates a lot of cash flow and that they buy back stock," he added.
How far Buffett takes this investment is one of the big questions hanging over the company ahead of this weekend's shareholder meeting.
In August of last year, the company received regulatory approval to purchase up to 50% of Occidental common stock. A play for the entire company isn't out of the realm of possibility Shanahan said.
Berkshire executive Greg Abel, heir apparent to Warren Buffett, is also chair of subsidiary Berkshire Energy Holdings. "If [Buffett] were to ultimately acquire Oxy, which he may do, it would be complementary to his other activities of Berkshire Hathaway Energy," said Shanahan.
"And I think that potentially with Greg Abel taking over as CEO of Berkshire, [Hollub] could be a candidate to run Berkshire Hathaway Energy at some point."
Buffett's influence on energy markets
Shanahan, one of the few Wall Street analysts who covers the sprawling Berkshire Hathaway empire, calculates Berkshire's energy investments account for about 13% – or $48 billion — of Berkshire’s roughly $360 billion equity portfolio. Shanahan maintains a Buy rating on the stock.
The conglomerate's entire balance sheet holds a total of about $950 billion in assets, including its insurance operations, wholly-owned subsidiaries, and fixed-income investments.
And Buffett's bets in the oil and gas industry have brought additional confidence to bulls in the space.
Bob Iaccino, co-founder at Path Trading Partners, said Buffett's bets on midstream oil infrastructure plays like Phillips 66 (PSX) and Kinder Morgan (KMI) caught his eye over the past decade.
"I was sort of bolstered, as somebody who thinks we have at least 15 or 20 years of fossil fuels being widely dominant," Iaccino told Yahoo Finance. "I thought his midstream infrastructure investments were some of the things that were more influential."
Berkshire has since closed both of these positions.
The ties between Buffett and Occidental Petroleum go back to April 2019, when Berkshire Hathaway backed Occidental's proposed bid for Anadarko Petroleum with a $10 billion commitment. The deal was pivotal in the company winning its pursuit of Anadarko against Chevron's rival offer.
Buffett's cash infusion gave Berkshire 100,000 preferred shares and the right to buy up to 80 million common shares of the company at $62.50. At the time, Occidental shares were trading just shy of $60.
The stock tanked at the onset of the pandemic, however, as oil prices collapsed amid fears about the global economy. Occidental stock rallied massively last year as oil prices surged and Berkshire has continued buying.
"They've been pretty disciplined that if you look at all the data Berkshire doesn't seem to have a lot of interest in buying the stock above $60 per share," said Shanahan, who calculates the cost basis comes in around $54.90.
Buffett's affinity towards Oxy may stem from his admiration of Hollub's leadership as CEO and the company's carbon capture strategy, in Shanahan's view.
"What they're going to be able to do is sell carbon capture credits — ultimately sell oil, like net zero oil, at a premium to the market," Shanahan said.
In March, Berkshire scooped up another 3.7 million shares of Occidental. Berkshire's ownership percentage also continues to go up each time Occidental buys back its own shares.
Last year's elevated oil prices were a boon for energy companies.
Occidental soared a whopping 117% in 2022 amid historically elevated energy prices, closing at a 52-week high of $75.97 on November 7. The Energy sector (XLE) rose more than 50% in 2022 amid the stock market's worst year since 2008.
Shares have since come off those levels as oil trends lower amid growing banking and recession concerns. Occidental shares are down roughly 5% year-to-date, compared to the S&P 500 index’s 1% gain.
In February, Occidental Petroleum announced record net income for 2022 and a new $3 billion share repurchase authorization along with a 38% dividend hike.
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>>> 5 Buffett Stocks to Buy and Hold Forever
Motley Fool
By Keith Noonan
Apr 27, 2023
https://www.fool.com/investing/2023/04/27/got-1000-5-buffett-stocks-to-buy-and-hold-forever/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Buffett is best known as a value investor, but Berkshire's portfolio also houses promising growth stocks.
Growth-oriented investors may be able to score wins by taking inspiration from Berkshire's tech and fintech holdings.
These Buffett-backed tech stocks could deliver market-crushing performances through the next decade and beyond.
Berkshire Hathaway's (BRK.A) (BRK.B) track record of success in the investing world is virtually unparalleled. Since CEO Warren Buffett purchased a controlling stake in the company and became its leader in 1965, the investment conglomerate's share price has risen more than 2,768,000%. That means that if you owned and held a $1,000 equity position when the Oracle of Omaha bought the company, it would now be worth roughly $27.7 million.
Berkshire's current size and risk-averse approach to investing mean it's unlikely that the investment conglomerate will manage to match that outsized performance going forward for new investors with $1,000 available to put toward stock purchases. Still, Berkshire continues to grow at a healthy rate and it does happen to own shares in some forward-looking technology companies that could deliver big returns for long-term investors.
If you've got $1,000 available that you don't need to pay bills, bolster an emergency fund, or reduce short-term debts, you might want to put it toward the purchase of some Berkshire-backed stocks that actually could take your portfolio to the next level. Read on for a look at five Berkshire holdings that have the potential to crush the market.
1. Apple
If you want to know what Buffett's favorite stock is, you don't have to read tea leaves or check horoscopes and planetary alignments. Berkshire's quarterly 13F portfolio disclosure filings show the obvious answer. Apple (AAPL) stock is the investment conglomerate's largest holding, by far, and accounts for nearly 44% of its total stock holdings.
Speaking on the company's incredible brand strength and customer loyalty, Buffett recently said, "If you're an Apple user and somebody offers you $10,000, but the only proviso is they'll take away your iPhone and you'll never be able to buy another, you're not going to take it." (wanna bet?) Apple's dominance in the mobile hardware space has made it one of the world's most profitable companies, and it doesn't look like the tech titan is in any danger of losing its industry-leading position anytime soon.
While Apple's strengths have helped it hold up better than most other tech stocks, shares are still down roughly 9% from their high. Thanks to the company's mobile empire, an impressive software and services ecosystem, and untapped growth opportunities in categories including augmented reality and smart cars, the tech leader has clear avenues to continue beating the market.
2. Amazon
Amazon (AMZN) spearheaded the growth of the e-commerce and cloud infrastructure services, and there's a very good chance that it will continue to be one of this century's strongest and most influential companies. While the tech giant's core e-commerce and cloud businesses have faced some macroeconomic headwinds over the last year, Amazon retains leadership positions in both categories, and these two business pillars still look poised for big growth over the long term.
Beyond e-commerce and cloud infrastructure services, Amazon also has massive growth opportunities in other categories. The company has already used advantages created by its online retail platform and data expertise to build the U.S.'s third-largest digital advertising business, and it has plenty of untapped expansion potential in the ads market. Amazon's recently announced Bedrock artificial intelligence (AI) service for building and scaling applications could also be a game changer, and it's likely that AI technologies will spur a wide range of improvements across various aspects of the overall business.
With its incredible breadth of competitive advantages and vast long-term growth potential still ahead, Amazon looks like a smart buy for long-term investors.
3. StoneCo
StoneCo (STNE 4.41%) is a Brazil-based fintech company that provides small and medium-sized businesses (SMBs) with payment processing services. It's also been a provider of loans for SMBs, but this part of the business has struggled due to challenges related to the coronavirus pandemic and a reliance on data that proved to be insufficient for assessing whether businesses were creditworthy.
StoneCo still carries roughly $79 million in bad debt in its loan portfolio, but the company still managed to grow sales by roughly 99% last year, and non-GAAP (adjusted) net income soared 520% in the period. Yet, despite the business growing at an impressive clip and being on track to cover the remaining debt in its portfolio, the company's share price remains down roughly 87.5% from its high.
With the business growing rapidly, StoneCo looks cheaply valued trading at roughly 19 times this year's expected earnings and 1.6 times expected sales.
4. Nu
Like StoneCo, Nu (NU) is a fintech company based in Brazil. The company provides digital banking services and also operates in Mexico and Columbia, and it's been growing at a rapid pace.
The company closed out last year with 74.6 million total customers, up 38.6% year over year, and sales and earnings have soared thanks to new customer additions and higher levels of engagement from those already using its services. Nu's sales surged 128% year over year in the fourth quarter, and net income surged to $113.8 million from $3.2 million in the prior-year period.
Due to macroeconomic pressures, the company's share price trades down roughly 58.5% from its high, and investors have an opportunity to buy the stock at levels that leave room for big upside. Nu is on track to benefit from exploding demand for digital banking services in Latin America, and it could deliver market-crushing returns for long-term shareholders.
5. Snowflake
Snowflake (SNOW) is a leading provider of data warehousing and analytics tools. The company's Data Cloud platform makes it possible for businesses to combine and analyze information that comes from distinct cloud infrastructure services.
According to a survey conducted by S&P Global Intelligence, 98% of enterprise respondents said they either intended to use or were already using cloud infrastructure services from two different providers. Some 31% of respondents in the survey were already using four or more cloud infrastructure providers. The business world is already heavily dependent on multi-cloud setups, and Snowflake is positioned to play a key role in fostering the evolution of analytics, machine learning, artificial intelligence, and a wide range of other technologies and services.
Trading down 65% from its high, this Berkshire portfolio component looks like a worthwhile buy for growth-oriented investors.
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BERKSHIRE HATHAWAY INC.
Charles Munger (Charlie), BRK Vice Chairman Warren Buffett, BRK Chairman/CEO Photo circa 1970
Berkshire Hathaway, Inc NYSE Symbols: BRK-A Class A shares BRK-B Class B shares | Berkshire Hathaway, which began in 1839 as a textile mill, neared collapse in 1962 when 32-year old Warren Buffett started buying control in the belief the company could be saved. Buffett initially maintained Berkshire’s textile business, but by 1967, he was expanding into other investments. Berkshire bought stock in the Government Employees Insurance Company (GEICO) that now forms the core of its colossal insurance operations. Other early acquisitions included See's Candies, Blue Chip Trading Stamps and Dairy Queen. BRK moved from the OTC to the NYSE in 1988. Today Berkshire is a combination of 66 wholly owned subsidiaries such as the BNSF Railroad and 47 passive minority investments, notably its huge stake in Apple. As of 2021, BRK has a market cap of >$600 billion and 360,000 employees. Berkshire Hathaway is the nation's 7th largest business. |
Useful Links Berkshire Subsidiary Companies Buffett's Famous Annual Letters BRK Portfolio Tracker CNBC Buffett Archive http://www.BerkshireHathaway.com/ Buffett's office in Omaha. His desk has no computer Headquarters Address:: 3555 Farnam Street Omaha, NE 68131 b | |
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