Berkshire Hathaway, the multinational conglomerate led by Warren Buffett, made significant changes to its stock portfolio in the fourth quarter of last year. The company’s latest 13-F report, released on Wednesday, revealed that Berkshire reduced its holdings in Apple, Paramount Global, and HP, while increasing its investment in Chevron.
Apple: A slight reduction in shares
Berkshire sold 10 million shares of Apple during the fourth quarter. Despite this reduction, the company still holds an impressive 905 million shares of the tech giant, which are currently valued at approximately $166 billion. It’s worth noting that Apple’s stock saw a slight decline of 0.7% in premarket trading on Thursday.
Chevron: An augmented investment
On the other hand, Berkshire decided to add to its position in Chevron. The company bought an additional 16 million shares of the second-largest domestic energy company, bringing its total investment to 126 million shares, with an estimated value of around $19 billion. This purchase in the fourth quarter followed a sale of approximately 13 million shares in the previous quarter. Chevron’s stock experienced a modest gain of 0.8% in premarket trading.
Paramount Global and HP: Reductions in holdings
Berkshire sold about one-third of its investment in Paramount Global during the fourth quarter, leaving the company with 63 million shares of the media company. Meanwhile, its stake in HP, a prominent manufacturer of PCs and printers, significantly decreased by 80 million shares, resulting in a remaining ownership of approximately 23 million shares. Paramount’s stock suffered a decline of 4.3% in premarket trading, while HP remained unchanged.
DR Horton: A complete divestment
In addition to the adjustments mentioned above, Berkshire also decided to eliminate its entire holding of about 6 million shares in DR Horton. As the country’s leading home builder, DR Horton saw its shares decrease by 1.4% in premarket trading.
These changes in Berkshire Hathaway’s stock portfolio reflect their strategic approach to managing investments and taking advantage of market opportunities. It will be interesting to observe how these adjustments impact the conglomerate’s performance in the coming quarters.
Buffett’s Management of Berkshire’s Equity Portfolio
Warren Buffett, the legendary investor, oversees approximately 90% of Berkshire Hathaway’s equity portfolio, which is valued at around $350 billion. The remaining portion is handled by managers Ted Weschler and Todd Combs. However, Berkshire does not disclose which manager is responsible for the buys and sells in the equity portfolio.
It is worth noting that while Buffett manages the majority of Berkshire’s investments, a small portion of the company’s substantial Apple investment is held by either Combs or Weschler. Therefore, it is difficult to determine with certainty whether the Apple sales reported in the latest quarter were executed by Buffett himself or his fellow managers.
Berkshire’s investment in Paramount has not proven to be as successful. Analysts estimate that its cost exceeds $30 per share. Despite this, Berkshire acquired a significant stake in Paramount during the first quarter of 2022, making it one of the largest shareholders in the company.
Undoubtedly, one of Warren Buffett’s most significant achievements during his tenure as Berkshire Hathaway’s leader since 1965 has been the Apple investment. The company’s average cost basis in Apple is approximately $34 per share, based on information disclosed in CEO Warren Buffett’s annual letter published in early 2022. As of Wednesday, Apple’s stock price stood at $184, resulting in a staggering paper profit of about $135 billion for Berkshire Hathaway, as estimated by industry experts.