Berkshire Hathaway trims Apple stake by 10 million shares

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Warren Buffett

15th February 2024 – (Omaha) Berkshire Hathaway, the investment vehicle steered by Warren Buffett, has pared down its Apple holdings by 10 million shares during the final quarter of 2023. This sale equates to a trimming of approximately 1.1 per cent of Berkshire’s investment in the tech titan—a notable pivot given Buffett’s previous assertion that a prior reduction was “probably a mistake”.

The divestment has slightly reduced Berkshire’s exposure to a company that has grown into a cornerstone of its portfolio, representing around a fifth of its market valuation. Having first placed its bet on Apple in 2016, Berkshire Hathaway has watched its investment flourish under the tutelage of either Todd Combs or Ted Weschler, Buffett’s trusted investment lieutenants.

After an initial investment, Buffett, sometimes called the “Oracle of Omaha”, increased his stake in the tech behemoth, investing heavily in the stock. By 2022, the initial outlay was publicly recorded at just over $31 billion, a stake that has since reaped considerable returns. Even after the recent offloading of shares, Berkshire maintains a 5.9 per cent interest in Apple, which was valued at $174 billion at the close of the year, dwarfing its next largest publicly traded commitment in Bank of America.

The strategic retreat from Apple was part of a broader portfolio shuffle by Berkshire, as revealed in their latest filing with the Securities and Exchange Commission. The conglomerate also dramatically reduced its position in HP, cutting its stake by 78 per cent, and retreated from the media landscape by offloading 32 per cent of its Paramount Global shares. The initial investment in Paramount had been interpreted as a vote of confidence in the company’s streaming service, Paramount+, and its potential to rival industry juggernauts such as Netflix and Disney.

The precise impetus for these moves remains under wraps, with no clear indication of whether they were Buffett’s own plays or those directed by his deputies.

Furthermore, Berkshire Hathaway has exited multiple positions, including investments in StoneCo, Globe Life, Markel Corporation, and notably, DR Horton. The latter’s sale marks a surprising pivot given Berkshire’s reputation for long-term investment strategies; it had disclosed its stake in the leading US homebuilder a mere six months prior.

The shake-up has resulted in a leaner, more focused portfolio, with the number of securities held by Berkshire dwindling from 49 to 41 over the course of the year. This refinement follows earlier exits from positions in major firms such as General Motors, UPS, and Procter & Gamble.

Notably absent from the fourth-quarter activity were any announcements of fresh investments. However, Berkshire did increase its holdings in SiriusXM, Chevron, and Occidental Petroleum, signalling continued confidence in these sectors.

Berkshire Hathaway, typically reticent with public commentary, has not provided a statement regarding these latest portfolio adjustments.

Adding a layer of intrigue, for the second consecutive quarter, Berkshire disclosed an omission in its quarterly report, requesting confidential treatment from the SEC—a move commonly associated with ongoing significant acquisitions.