Buffett slashes Berkshire Hathaway’s Apple stake

[Pelican Press 0]

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Buffett slashes Berkshire Hathaway’s Apple stake

Billionaire Warren Buffett has slashed Berkshire Hathaway’s massive Apple stake in a move that could prove unsettling for the broader stock market – both because the investor is so revered and because there had been little positive financial news lately.

Just two years ago Buffett called the stock one of the four giants of his conglomerate’s business alongside Berkshire insurance, utility and BNSF railroad businesses that it owns outright.

That gave investors the impression that Buffett might hold onto Apple indefinitely like he has with the Coca-Cola and ********* Express shares he bought decades ago.

However, he has trimmed the Apple stake over the past year and has recently also sold off some of his stock in Bank of America and ******** EV maker BYD while doing very little buying.

As a result, Buffett is sitting on nearly $US277 billion ($A425 billion) in cash, up from what was already a record $US189 billion just three months earlier.

“This could could alarm the markets especially given the news from last week” with weak tech earnings, a disappointing jobs report and uncertainty about the future of interest rates, Edward Jones analyst Jim Shanahan said.

Buffett has consistently lavished praise on Apple CEO Tim Cook, who attended Berkshire’s annual meeting in Omaha in May, and talked about the way consumers are feverishly devoted to their iPhones and don’t like to switch.

He did trim more than 10 per cent of Berkshire’s Apple stake in the first three months of this year when he sold off more than 116 million shares but the ***** disclosed on Saturday was a much ******* move.

Berkshire did not give an exact count of its Apple shares in Saturday’s report but it estimated the investment was worth $US84.2 billion at the end of the second quarter even though shares soared over the northern hemisphere summer as high as $US237.23.

At the end of the first quarter, Berkshire’s Apple stake was worth $US135.4 billion.

Shanahan estimates that Berkshire still holds about 400 million Apple shares.

Still, while CFRA Research analyst Cathy Seifert said she looks at the Apple ***** more as responsible portfolio management because the tech giant had become such a large portion of Berkshire’s holdings, it does look like Buffett may be preparing for a downturn.

“This is a company girding itself for a weaker economic climate,” Seifert said.

Berkshire reported a small drop in its bottom-line earnings because a drop in the paper value of its investments.

The company said it earned $US30.348 billion, or $US21,122 per Class A share, during the second quarter – down from $US35.912 billion, or $US24,775 per A share a year ago.

Berkshire owns an assortment of insurance businesses along with BNSF railroad, several major utilities and a varied collection of retail and manufacturing businesses, including brands like Dairy Queen and See’s Candy.

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