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Legendary investor Warren Buffett has revealed that Berkshire Hathaway Inc. (NYSE:BRK) (NYSE:BRK) made significant stock sales in the second quarter, including a substantial reduction in its holdings in Apple Inc. (NASDAQ:AAPL).
What happened: Buffett’s firm sold more than 389 million shares of Apple stock in the second quarter, according to the company’s latest U.S. Securities and Exchange Commission filing on Wednesday. Despite the sales, Berkshire Hathaway still owns 400 million shares of Apple stock.
News that Buffett had sold a significant portion of Apple shares was revealed in Berkshire’s earnings report earlier this month, but the exact number of shares sold did not become clear until Wednesday.
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In addition to Apple, Berkshire Hathaway has also reduced its investments in Bank of America Corp (NYSE:BAC), Chevron Corporation (NYSE:CVX), Capital One Financial Corp. (NYSE:COF), Floor & Decor Holdings Inc (NYSE:FND), T-Mobile US, Inc. (NASDAQ:TMUS) and Louisiana-Pacific Corporation (NYSE:LPX).
The company increased its holdings in Chubb Limited (NYSE:CB) to 27,033,784 shares and Occidental Petroleum Corporation (NYSE:OXY) to 255,281,524 shares. It also made new, smaller investments in aerospace parts maker Heico Corp (NYSE:HEI) with 1,044,242 shares and cosmetics retailer Ulta Beauty Inc (NASDAQ:ULTA) with 690,106 shares.
Tesla Inc. CEO Elon Musk commented on Berkshire Hathaway’s substantial $277 billion cash reserves, predicting changes as T-bill yields fall following the disclosure of the conglomerate’s stock sales. Musk said: “$277 billion cash reserves is wild. That will change as T-bill yields fall.”
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Why it’s important: Buffett’s investment decisions have always been closely watched due to his remarkable track record. This latest move comes as Berkshire Hathaway shares have risen more than 20% year-to-date, despite having lagged the broader stock market for much of the year due to its large stake in Apple.
Earlier in August, Buffett’s decision to sell nearly half of Berkshire’s Apple shares was seen by Elon Musk as an indication of an impending market correction.
Global market volatility has also tested Buffett’s investments. Despite a significant initial plunge, Berkshire’s $20 billion investment in Japanese trading giants recovered most of its losses. The global market turmoil caused by Japan’s rate hike had a limited impact on these investments.
Buffett’s recent stock sales have also helped Berkshire’s cash reserves soar to a record $277 billion. This increase in cash reserves comes despite a 15.5% year-over-year decline in the company’s second-quarter net income, largely due to a decline in investment gains amid volatile market conditions.
Price promotion: Berkshire Hathaway Inc.’s Class A shares closed Wednesday at $657,122.00, up 1.24%. Year to date, it’s up 19.52%. Meanwhile, Berkshire Hathaway Inc.’s Class B shares closed the same day at $438.47, up 1.40%. In after-hours trading, it was up 0.14%. Year to date, the stock is up 20.97%, according to data from Benzinga Pro.
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This article Warren Buffett Still Owns 400 Million Apple Shares, Reveals New Investments in Ulta Beauty and Heico — Elon Musk Calls Berkshire Hathaway’s $277 Billion Cash Reserves ‘Wild’ originally appeared on Benzinga.com
