Warren Buffett’s Berkshire Hathaway is having its best year since 2021, despite a buyback freeze and stock-selling spree. Class A shares of the conglomerate have climbed 27% in 2024, outperforming the S&P 500. Berkshire’s 94-year-old legendary investor made several notable moves, including dumping nearly half of his Apple stake and downsizing his Bank of America holding.
Buffett started trimming his stake in Apple in the fourth quarter of 2023 and ramped up selling in the second quarter of 2024. He now owns about 300 million shares, down 67.2% from last year’s third quarter. Berkshire also sold a significant portion of its Bank of America stake, which has increased by over 35% this year due to the reelection of Donald Trump.
The company didn’t repurchase any company shares during the third quarter, and buyback activity had slowed significantly earlier in the year. Berkshire’s cash pile surpassed $300 billion for the first time in the third quarter, with the company stating it will only engage in buybacks when the price is below its intrinsic value.
In a minor acquisition, Berkshire bought back the 8% remaining stake in Berkshire Hathaway Energy for $2.37 billion. The company also made small equity investments in Domino’s Pizza and Pool Corp., which were likely made by Buffett’s investing lieutenants.
Analysts believe some of the cash will be used to invest in a “distress” situation during an economic downturn, providing an opportunity for the successors to make their own mark when Buffett officially hands over the reins.
Source: https://www.cnbc.com/2024/12/15/berkshire-hathaway-is-having-its-best-year-since-2021.html