On November 15th Beijing time, Berkshire Hathaway, a subsidiary of well-known American investor Warren Buffett, disclosed its latest 13F filing. The report shows that in the third quarter, Berkshire Hathaway reduced its holdings of Apple Inc. by 100 million shares, reducing its holdings to 26.24%. As of the end of the third quarter, Berkshire Hathaway held 10.4% of Bank of America's shares, while its holdings in American Express, Chevron, and Coca Cola remained unchanged; Newly purchased 3.65% of the outstanding shares of the consumer company Domino's Pizza.
Affected by this news, Domino's Pizza's US stock surged over 7% in after hours trading. Berkshire Hathaway also sold off cosmetics retailer Ulta Beauty, which had just established a position in the second quarter, with the stock falling more than 4% after trading.
New Warehouse Domino's Pizza
In terms of buying, Berkshire Hathaway added over 1.27 million shares of consumer company Domino's Pizza in the third quarter, with a market value of approximately $550 million and a shareholding ratio of approximately 3.65%. Berkshire also acquired approximately 1% of the shares of Pool Corp, a wholesaler of swimming pool equipment, valued at approximately $152 million. Pool and Domino's Pizza were first-time buyers, with Heico Corporation ranking third in terms of the amount of the target being added to the warehouse.
It is worth noting that as of the end of the third quarter, Berkshire Hathaway's holdings in Ulta Beauty have significantly decreased by 96.49% compared to the previous quarter, and Ulta Beauty is a stock that Berkshire Hathaway only opened a position in the second quarter. Berkshire Hathaway also reduced its holdings in First Capital Credit, Brazilian digital banking platform Nu Holdings, cable television service provider Chartered Communications, Apple Inc., and Bank of America; Clearance of building products company Floor& Decor and media company Liberty Sirius XM.
In terms of market trends, influenced by this news, the stock price of Ulta Beauty fell by more than 4% after the US stock market closed, while the stock prices of Domino's Pizza and Pool Corp rose by more than 7% and 6% respectively after the US stock market closed.
Reduce holdings of 100 million shares in Apple Inc.
Since the beginning of this year, Berkshire Hathaway has made significant reductions in its heavy holdings, with Apple Inc. and Bank of America receiving the most market attention.
According to the 13F document, as of the end of the third quarter, Apple still ranked first among Berkshire Hathaway's top five holdings, with a market value of approximately $69.9 billion, accounting for 26.24% of the investment portfolio, and a 25% decrease in holdings compared to the previous quarter; American Express ranks second with a market value of approximately $41.1 billion, accounting for 15.44% of the investment portfolio, and the number of holdings remains unchanged from the previous quarter. Bank of America, Coca Cola, and Chevron are the remaining three major holdings, accounting for over 6% of the investment portfolio.
However, Berkshire Hathaway's current holdings in Bank of America may be lower, and as we enter October, Berkshire will continue to reduce its holdings in Bank of America. According to documents disclosed by the US Securities and Exchange Commission (SEC), on October 15th, Berkshire sold approximately 8.6945 million shares of Bank of America stock, reducing its stake to less than 10%. This is also the last time that the SEC official website has disclosed Berkshire Hathaway's reduction in holdings of Bank of America.
In May of this year, at Berkshire Hathaway's annual shareholder meeting, Buffett explained that the reduction in Apple holdings was due to tax reasons. He believes that US tax rates will increase to fund the continuously expanding US fiscal deficit. However, judging from Berkshire Hathaway's large-scale sales of Apple and Bank of America stocks in the following two quarters, many market views believe that the reduction may not only be for tax issues.
Holding a huge amount of cash to stop repurchasing stocks
As of the end of the third quarter, the total market value of Berkshire Hathaway's holdings was $266 billion, slightly lower than the previous quarter's $280 billion. Berkshire Hathaway's top ten holdings account for 89.68% of the total market value, including Apple, American Express, Bank of America, Coca Cola, Chevron, Western Petroleum, Moody's, Kraft Heinz, Chubb Insurance, and DeWitt.
Overall, Berkshire Hathaway sold a net $34.6 billion worth of stocks in the third quarter. In fact, Berkshire Hathaway has been selling stocks this year to avoid major acquisitions and accumulate a large amount of cash.
As of September 30th, the total amount of cash and cash equivalents held by Berkshire Hathaway has risen to $325.2 billion, once again reaching a historic high. At the end of the second quarter of this year, the figure was $276.9 billion, and at the end of 2023 it was $167.6 billion, which also means that Berkshire's cash reserves have almost doubled compared to the beginning of this year.
While selling heavily, Berkshire also did not repurchase its own stocks. Earlier this year, as Berkshire Hathaway's stock price outperformed the market and reached a historic high, the company's repurchase activities have slowed down. Specifically, Berkshire did not repurchase any stocks in the third quarter, and only repurchased stocks worth $345 million in the second quarter, far lower than the $2.6 billion repurchased in the first quarter. The company has stated that when Buffett "believes the buyback price is below Berkshire's intrinsic value," the company will sell to repurchase stocks.
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