Position filings show that as the year-end approaches and his 'retirement' countdown begins, Buffett has adjusted his bets on U.S. tech giants.
On Friday, the 14th, after the U.S. stock market closed in the Eastern Time Zone, Berkshire Hathaway, led by Buffett, disclosed its 13F filing submitted to the U.S. Securities and Exchange Commission (SEC). The filing revealed that in the third quarter of this year, Berkshire's largest individual stock positions were concentrated in two tech giants: Apple and Alphabet, Google’s parent company. Among them, Apple was further sold off, while a position in Alphabet was newly established.
Commentators noted that considering Buffett's traditional value investment philosophy and his cautious stance toward high-growth tech stocks, the establishment of a position in Alphabet is somewhat surprising.
Apple Sold for Two Consecutive Quarters, Third Quarter Sell-Off Doubles
The 13F filing showed that Berkshire reduced its stake in Apple (AAPL) by approximately 41.79 million shares in the third quarter, marking a decrease of over 14.9% compared to the end of the second quarter, with the holding value declining by about USD 10.6 billion.
Based on the data from the 13F filing, this marks the second consecutive quarter that Berkshire has sold off Apple shares, with the selling pressure significantly intensifying in the third quarter. The number of Apple shares sold in the third quarter was more than twice the 20 million shares sold in the second quarter, and the decline in holding value was approximately 2.6 times that of the second quarter. This scale exceeded previous media estimates, which had projected that Berkshire might sell around 35 million Apple shares in the third quarter.
However, due to Apple’s share price rising by approximately 24% in the third quarter, Apple’s share of Berkshire’s total portfolio slightly increased from 22.31% in the second quarter to 22.69%.
Berkshire reduced its Apple holdings for the first time in half a year during the second quarter. In the second and third quarters of last year, Berkshire consecutively made substantial reductions in Apple shares, cutting its stake by 50% and 25%, respectively. Afterward, Berkshire’s Apple holdings remained unchanged in the fourth quarter of last year and the first quarter of this year.
In terms of changes in holding value, Apple was the stock that Berkshire reduced the most in the third quarter. Nevertheless, by the end of the third quarter, Berkshire still held more than 238 million Apple shares, making it the top holding.
Reduced Bank of America Holdings by Over USD 1.9 Billion in Q3; 45% Stake Reduced in Over a Year
Among Berkshire Hathaway's top ten holdings, apart from Apple, only Bank of America (BAC) was reduced in the third quarter. Approximately 37.2 million shares were sold during the quarter, representing a 6.15% decrease in shareholding compared to the previous quarter, with the holding value declining by $1.92 billion. The portfolio weight slightly decreased from 11.12% in the second quarter to 10.96%.
In terms of changes in the value of holdings, Bank of America was the second-largest stock reduction by Berkshire in the third quarter after Apple. According to the 13F filing data, Berkshire also intensified its selling efforts in the third quarter, with the number of shares sold increasing by more than 41% compared to the second quarter, though still less aggressive than media estimates. Previous reports estimated that Berkshire would reduce its stake in Bank of America by 50 to 100 million shares in the third quarter.
By the end of the third quarter, Bank of America remained Berkshire’s third-largest holding. However, over the past year, Berkshire has reduced its stake by more than 40%. By the third quarter of this year, Berkshire’s holdings in Bank of America had fallen from 1.03 billion shares at mid-last year to 568 million shares, a decline of nearly 45%.
First-time acquisition of 17.85 million shares of Alphabet
The 13F filing shows that Berkshire acquired approximately 17.85 million shares of Alphabet (GOOGL) in the third quarter, marking Berkshire’s first investment in the parent company of Google.
These Alphabet shares are valued at approximately $4.34 billion, accounting for 1.62% of Berkshire’s portfolio. Whether measured by the change in value or the percentage of holdings, Alphabet represents the largest individual stock purchase by Berkshire in the third quarter, far exceeding the scale of purchases for Chubb Ltd (CB.US), which ranked second.
Alphabet’s stock price surged over 37% in the third quarter and has risen more than 40% since the beginning of this year, making it one of the biggest winners in the U.S. stock market this year.
Some media reports suggest that the acquisition of Alphabet may have been orchestrated by Berkshire’s investment managers Todd Combs or Ted Weschler, who have been more active in the technology sector. One of them made an initial investment in 2019.$Amazon (AMZN.US)$。
Among the top ten holdings, Chubb Ltd was the only stock that saw an increase in position during the third quarter.
By the end of the third quarter, most of the top ten holdings of Berkshire Hathaway by market value were familiar names, with the only newcomer being $Alphabet-A (GOOGL.US)$ , which replaced the kidney dialysis provider ranked tenth in the second quarter,$DaVita (DVA.US)$, which fell to 11th place in the third quarter.
Among these major holdings, Berkshire Hathaway only increased its position in $Chubb Ltd (CB.US)$ during the third quarter, adding approximately 4.3 million shares, increasing the market value by $1.21 billion, and raising its portfolio share from 3.04% to 3.31%.
The top ten holdings of Berkshire Hathaway at the end of the third quarter were:
$Occidental Petroleum (OXY.US)$, moving up from seventh to sixth place
$Moody's (MCO.US)$, dropping from sixth to seventh place.
$Chubb Ltd (CB.US)$, rising from ninth to eighth place.
$The Kraft Heinz (KHC.US)$, falling from eighth to ninth place.
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Editor/Joryn