“An even better company” Star investor Buffett sells Apple shares
03.08.2024, 17:03 Listen to article
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Berkshire Hathaway, Warren Buffett’s investment company, sold almost half of its Apple shares in the second quarter. This reduced its position to 84 billion dollars. Meanwhile, the star investor is also further reducing his stake in Bank of America.
The company of famous investor Warren Buffett announced that it sold almost half of its Apple shares in the second quarter, further reducing its huge position in the iPhone maker’s securities after significant sales earlier in the year.
Berkshire sold $75.5 billion worth of stocks in the three months through June, boosting its cash holdings to a record $276.94 billion, including cash equivalents, according to the company’s quarterly report. This comes after Berkshire has systematically reduced its investment in Bank of America, its second-largest stock position after Apple, in recent days.
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The stock sales and mountain of cash show how difficult it is for Buffett to find good investments priced low enough to generate a solid return. The stock market has become more expensive: According to FactSet, the S&P 500 recently traded at nearly 21 times forecast earnings for the next 12 months. That’s above the 20-year average of nearly 16.
Buffett had spoken about the difficulty of using the cash at Berkshire’s annual meeting in May. “We would like to spend it, but we won’t spend it. Unless we think we’re doing something that has very little risk and can make us a lot of money,” he said.
Berkshire sold Bank of America shares worth about $3.8 billion in the 12 trading days through Thursday, according to Securities and Exchange Commission filings. That left it with a 12.15 percent stake in the bank, which would have been worth more than $35 billion at the close of trading on Friday.
Buffet’s decisions carry great weight with investors
Bank of America shares had rallied in recent months, rising 75 percent from a low in late October to when Berkshire began selling in July. “He doesn’t seem to love the banks,” said James Shanahan, senior equity research analyst at Edward Jones. “There’s been a lot of selling activity in the bank holdings over the last few years.
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The published report shows that Berkshire sold about 49 percent of its Apple shares in the second quarter, leaving it with a position worth $84.2 billion at the end of June. In the first quarter, the company had reduced its stake by 13 percent. Buffett had praised Apple on stage at Berkshire’s annual meeting in May, calling it “an even better company” than American Express and Coca-Cola, two other major holdings.
He suggested that expectations of rising tax rates played a role in the decision to take some profits on the position, which has grown in value as Apple stock has soared in recent years. Apple stock is up 14 percent in 2024. Buffett’s reputation as one of the greatest stock investors of all time means his decisions carry a lot of weight with many investors.
