Renowned American investor Warren Buffett’s Berkshire Hathaway company sold more Apple stocks in the third quarter and now holds a record cash reserve exceeding 300 billion US dollars for the first time.
According to the quarterly report released on Saturday, as of the end of September, Berkshire Hathaway held Apple stocks worth 69.9 billion US dollars. This indicates that Berkshire sold a quarter of its Apple stocks in the third quarter.
At the end of 2023, Berkshire held slightly over 900 million Apple shares.
However, even after the sale, Apple remains Berkshire’s largest holding. Apple has been one of Buffett’s big bets, and its continuous rise in recent years has brought him substantial returns amidst investors driving up the tech stock prices.
In 2024, Berkshire began reducing its Apple stocks. However, Buffett stated at the Berkshire Hathaway shareholders’ meeting in May that Apple outperformed other major holdings like American Express and Coca-Cola, suggesting that part of the sale was due to tax considerations.
Apple’s stock price rose by 16% in 2024, reaching near historic highs.
Berkshire Hathaway’s financial statements show that as of the end of September, cash (including equivalents) surged to a record-breaking 325.2 billion US dollars.
The Wall Street Journal reported that Buffett holding a huge cash position indicates that once he finds an attractive company, he can quickly make a deal. However, it also shows the challenge he faces in finding appealing investment opportunities.
According to FactSet data, Buffett’s company did not repurchase any stocks in the third quarter for the first time since 2018.
After several quarters of significant buybacks, the company’s repurchases have slowed to nearly none in recent months. Berkshire B shares have risen by 27% this year, while the S&P 500 index increased by 20%.
Earlier this year, Berkshire Hathaway’s market value briefly surpassed 1 trillion US dollars.
In the third quarter, Berkshire also reduced its stake in American Bank and continued selling in October. Since Berkshire held over 10% of American Bank shares, it is required to promptly report trading activities.
However, after the recent reduction, Berkshire’s stake in American Bank has dropped below 10%, and observers may have to wait until February 2025 to see if Berkshire will continue selling American Bank shares.
Berkshire reported a third-quarter net income of 26.3 billion US dollars, equivalent to 18,272 US dollars per Class A share, compared to a net loss of 12.8 billion US dollars, or a loss of 8,824 US dollars per share in the same period last year.
Operating profit (excluding some investment income) declined from 10.8 billion US dollars last year to 10.1 billion US dollars. Poor insurance underwriting performance dragged on operating profit.
Berkshire stated that the quarterly profit was affected by losses from Hurricane Helene. The company expects the fourth-quarter profit to reflect losses from Hurricane Milton, with pre-tax losses potentially ranging between 1.3 billion and 1.5 billion US dollars.
Buffett mentioned that operating profit is a better indicator of Berkshire’s performance. Accounting rules require companies to include unrealized gains and losses from investments in net income, which could overshadow Berkshire’s operational performance due to market fluctuations.