Berkshire Hathaway
Star investor Warren Buffett cashes in on Apple shares
Warren Buffett separates from more Apple shares
© John Peterson/ASSOCIATED PRESS / Picture Alliance
Warren Buffett’s investment company is significantly divesting stocks – including Apple shares. As the star investor is not buying new stocks, Berkshire Hathaway’s cash reserves are increasing massively.
Star investor Warren Buffett is relying less and less on stocks. After years of stock market boom, the 93-year-old significantly sold off shares of Apple and other companies from the portfolios of his investment firm Berkshire Hathaway in the second quarter. As the company announced on Saturday, the stockpile shrank by 390 million to about 400 million Apple shares by the end of June. Already in the first quarter, Buffett had cashed in 115 million Apple shares.
In return, Berkshire Hathaway’s cash reserves increased by almost 88 billion to 277 billion dollars in the second quarter. This marks the seventh consecutive quarter in which the company sold more stocks than it bought. “We would love to spend it,” Buffett said at Berkshire’s annual meeting in early May. “But we won’t spend it as long as we think it poses a very low risk and we can make a lot of money.” Nonetheless, he remains a fan of Apple. The iPhone manufacturer is expected to remain Berkshire’s largest stock investment in the future.
“Looking at Berkshire’s overall picture and the macroeconomic data, one can confidently conclude that Berkshire is positioning itself defensively,” explained analyst Cathy Seifert from CFRA Research. She rates Berkshire stocks as a buy recommendation. There was a sell-off in the stock markets on Friday. Weak US labor data fueled concerns about the US economy. In addition, investors were preoccupied with the question of whether the US Federal Reserve had waited too long to lower interest rates.
Flourishing Insurers
Berkshire Hathaway’s operating profit, derived from the profits of the company’s owned businesses, increased by 15 percent year-on-year to 11.6 billion dollars. Almost half of this was contributed by Berkshire’s insurance companies, including the thriving auto insurer Geico. This more than compensated for profit losses from the freight railroad company BNSF and the energy provider Pacificorp, which set aside more money for legal disputes.
Berkshire Hathaway’s net profit fell by 15 percent to around 30 billion dollars. Buffett regularly advises his shareholders not to overvalue this figure, as it is heavily influenced by the fluctuating prices in the stock portfolio.