© Reuters. Berkshire Hathaway Chairman Warren Buffett walks through the exhibition hall as shareholders gather to hear from the billionaire at Berkshire Hathaway Inc’s annual general meeting in Omaha
From Jonathan stamp
(Reuters) – Warren Buffett’s Berkshire Hathaway (NYSE 🙂 Inc announced two major new investments Tuesday, revealing a $ 8.6 billion stake in the phone company Verizon Communications Inc (NYSE 🙂 and a $ 4.1 billion stake in the oil company Chevron Corp. (NYSE 🙂
The investments were made public in a filing listing the US-listed Berkshire holdings as of December 31st.
Berkshire also announced a new $ 499 million stake in professional services company Marsh & McLennan Cos.
To make room, Berkshire trimmed its investments in several companies, including Apple Inc (NASDAQ :), though the iPhone maker remains by far its largest common stock stake at around $ 121 billion.
Verizon shares rose 3.0%, Chevron 2.2%, and Marsh remained unchanged in off-hours trading after Berkshire’s filing.
The filing on Tuesday signals where Buffett and his portfolio managers Todd Combs and Ted Weschler see value, though Buffett typically handles larger investments.
It also shows that Berkshire is finding ways to deploy its cash hoard, which totaled $ 145.7 billion as of September 30.
Based in Omaha, Nebraska, the conglomerate owns more than 90 companies including Geico auto insurance, BNSF railways, and Dairy Queen ice cream. However, five years have passed since its last major acquisition, the $ 32.1 billion purchase of Precision Castparts.
Berkshire had begun investing in Verizon, Chevron and Marsh in the third quarter of last year and received approval from the US Securities and Exchange Commission to delay disclosure of the shares.
The SEC has quietly let Berkshire invest in companies several times over the years to avoid investors piggybacking Buffett’s bets and raising the company’s stock prices before Berkshire is done with the purchase.
The filing on Tuesday showed that Berkshire, a major investor in Bank of America Corp (NYSE :), curtailed smaller banking competitors and reduced its stake in Wells Fargo (NYSE 🙂 & Co and JPMorgan Chase & Co (NYSE :), M&T Bank Corp (NYSE 🙂 and PNC Financial Services Group Inc (NYSE :).
Berkshire also invested more in drug makers Abbvie Inc, Bristol-Myers Squibb (NYSE 🙂 Co, and Merck & Co, and sold a small stake in vaccine maker COVID-19 Pfizer Inc. (NYSE 🙂 It also has mining company Barrick Gold (NYSE 🙂 Corp.
Doug Kass, managing partner of Seabreeze Capital Investment Inc. of Palm Beach, Fla., Said the Verizon stake “makes sense” for Berkshire, reflecting the phone company’s dividend payouts and prospects for cellular revenue growth.
The lowered bank holdings could reflect Buffett’s concerns about persistently low interest rates and credit losses related to the coronavirus, Kass added.
Berkshire should provide more details on its investments when it releases year-end results and Buffett’s annual shareholder letter on February 27th.
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