It’s that time of the quarter when investment managers must disclose their positions to the public. Among them, Buffett remains the most closely watched, with many eager to see his moves and may even mirror them.
The most recent significant move was Berkshire Hathaway selling half of its stake in Apple. This caused a stir among investors, leading many to speculate whether it signals a market crash or a weakening in Apple. However, that’s now old news. In fact, Berkshire trimmed more than just Apple—there were ten other sales.
The most noteworthy of these was Snowflake, which Berkshire sold entirely. Another complete exit was Paramount, though this wasn’t a surprise as Berkshire had been gradually trimming this position. Other notable reductions include Bank of America and Chevron, both of which have been core holdings in the portfolio, but Berkshire has been steadily selling down its stakes over the past few quarters. It appears that Berkshire is paring down its larger positions, a sign that the portfolio is becoming less concentrated—a strategy not typically associated with Buffett. This suggests that these decisions might have been made by other managers rather than Buffett himself.
Only American Express and Coca-Cola positions remain untouched among the top five holdings. Buffett has mentioned in his shareholder letters that he has no intention of selling these, and he has stayed true to that.
Berkshire did make some purchases, showing that it wasn’t all about selling. The most notable buys were two new positions in Ulta Beauty and Heico. Both are small positions, indicating that Berkshire didn’t feel the need to cloak these purchases, unlike the secrecy that surrounded their acquisition of Chubb. This also suggests that these positions might not grow significantly in the future, given that Berkshire didn’t bother with concealment.
Ulta is a cosmetics retailer competing with LVMH’s Sephora, while Heico is an aerospace supplier. The “Buffett effect” remains potent, as seen in the 14% and 4% price jumps in Ulta and Heico shares, respectively, following the filing.
Overall, Berkshire is still a massive net seller of stocks, with a net reduction of $79 billion, primarily due to the large disposal of Apple, its largest position. I don’t believe Buffett is predicting a market crash; he’s not one to time the market. This move likely stems from fundamental reasons or a view that current prices aren’t attractive enough for significant buys.
Lastly, we observed beleaguered blue-chip Nike being bought by Bill Ackman’s Pershing Square. Nike’s share price has fallen 26% year-to-date, and Ackman’s vote of confidence was much needed. The stock jumped 3% in after-hours trading following Pershing Square’s filing.
There are plenty of blue chips that have been beaten down this year. Examples include Estée Lauder, Intel, Walgreens, and Warner Bros. Discovery. Starbucks has also caught the attention of shareholder activists, and Ulta was another underperformer picked up by Berkshire. Perhaps we’ll see some of these laggards eventually snapped up by other fund managers as more 13F filings are reported.