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Apple makes up 40% of Berkshire Hathaway’s equity portfolio.
Johannes Izel / AFP via Getty Images
Love Warren Buffett
Apples
,
But Berkshire Hathaway’s large holdings in the iPhone maker are hurting: Apple shares have fallen nearly 20% this quarter.
Berkshire Hathaway (Ticker: BRK. A, BRK. B) had about 911 million Apple shares as of March 31, and that position has dropped to about $ 30 billion since then, with no change in holding. That drop does account for the bulk Baron’s Berkshire’s huge equity portfolio lost about $ 45 billion in paper this quarter, to 31 390 billion as of March 31.
Shares of Apple, which was down 1.4% at $ 138.86 in midday trading on Thursday, closed at around 5 175 this quarter. Buffett added little to the Berkshire holdings in the first quarter, bought nearly 3 million shares and probably paid less than $ 150, according to a comment he made on CNBC.
Shares in Berkshire Class A were down 1.3% from 453,650; Class B stock was down 1.5% at 302.21. The market value of Berkshire is about 65 665 billion.
Apple made up 40% of the Berkshire equity portfolio and the other four stocks made up another 30%:
Bank of America
(BAC),
American Express
(AXP),
Chevron
(CVX), and
Coca Cola
(KO).
Buffett, CEO of Berkshire, has ridiculed diversity for sophisticated investors like himself, saying Berkshire’s egg-in-a-basket approach has served it well for more than half a century.
Paper losses until the end of the quarter – the worst financial results for the company since the first three months of 2020 and will hit book prices. Berkshire lost মার্চ 50 billion in the March 2020 quarter.
Under the accounting rules, changes in the value of Berkshire’s equity portfolio flow through income – a rule that Buffett regularly distorts financial results. The company is expected to earn about $ 7 billion after taxes from operations in the current period.
Baron’s Berkshire estimates its current book value is about 6 326,000 per Class A share, with expected profit for the current quarter, about 5% lower than the March 31 figure of $ 345,000. That means Berkshire stock trades 1.4 times the estimated book value.
Berkshire slowed its stock repurchase in the March quarter as its shares rose and manually topped the S&P 500. The company bought $ 3.2 billion worth of stock during this period, an average of about $ 7 billion per quarter in 2021. Even with pullbacks, the Berkshire S&P 500 is still 2% higher this year, compared to a 17% fall.
Buffett said at Berkshire’s annual meeting a few weeks ago that the company had not bought any stock in April when Class A shares were mostly traded above $ 500,000. Buffett said Berkshire would be price conscious in the event of a repurchase of its shares.
It will be interesting to see if Berkshire resumes buying its stock this month. By 2021, Berkshire was in favor of buying its own stock instead of buying equity in other companies. Buffett turned upside down in the first quarter, buying a record 51 51 billion worth of stock – especially Chevron and
Occidental Petroleum
(OXY) and Berkshire’s stock buyback is slowing.
Write to Andrew Barry at [email protected]
