When Berkshire Hathaway is a multinational conglomerate holding company. ( BRK.A 0.87% ) ( BRK.B 0.96% ) When the CEO Warren Buffett makes transactions with a company’s shares, both experienced and regular investors take notice. This is because the well-known “Oracle of Omaha” has achieved an annualized total return that is almost twice as high as the benchmark. S&P 500 Since taking over as CEO in 1965, the total return on Berkshire’s Class A shares has nearly doubled over the span of almost sixty years. This translates to a remarkable 5,347,200% increase as of the closing bell on Aug. 15.
Despite being prone to mistakes like any other investor, Buffett is… showed a talent for discovering fantastic bargains that were not obvious at first glance Therefore, following his lead has proven to be a successful investment approach for many years.
Understanding when to sell stocks is equally important as knowing which stocks to purchase.
The CEO of Berkshire Hathaway is Warren Buffett. The image is from The Motley Fool.
Last week, Form 13Fs The documents were submitted by institutional investors who manage a minimum of $100 million in assets. A 13F form offers a brief overview of the investment activities of top financial professionals on Wall Street, showcasing their recent purchases and sales.
Berkshire Hathaway’s recent 13F filing showed that Warren Buffett, along with his top investment managers Todd Combs and Ted Weschler, have been actively selling stocks at a record pace. This team has now completed seven straight quarters of selling off equity securities. Over $75 billion in total sales of equity assets in the quarter ending in June. .
Below are the 10 stocks that Warren Buffett sold during the second quarter.
Contents
- 1 1. Apple sold 389,368,450 shares, which led to a decrease of 49.33% in their stake.
- 2 Paramount Global: Completed the sale of all its holdings (7,531,765 shares).
- 3 3. Snowflake: Sold all of its holdings (6,125,376 shares)
- 4 Chevron sold 4,369,673 shares, reducing its stake by 3.55%.
- 5 Capital One Financial sold 2,651,978 shares, decreasing its stake by 21.27%.
- 6 Floor & Décor sold 802,130 shares, which resulted in a 16.78% decrease in their stake.
- 7 Louisiana-Pacific sold 633,154 shares, reducing its stake by 9.6%.
- 8 T-Mobile sold 570,000 shares, decreasing its stake by 10.87%.
- 9 The Liberty Live Group sold 214,929 Series C shares (LLYV.K), reducing its stake by 1.93%, and also sold 65,330 Series A shares (LLYV.A), reducing its stake by 1.29%.
The most surprising revelation from Berkshire Hathaway’s 13F report, which was essentially hinted at earlier this month with the release of the company’s second-quarter performance data, was the a decrease of almost half in top holding Apple ( AAPL -0.07% ) .
Buffett has remained steadfast in his admiration for Apple as a company and truly values its qualities. program that historically provides returns on capital During the annual meeting for his company in May, he expressed his belief that corporate tax rates might increase in the coming years. Considering Berkshire Hathaway’s substantial unrealized profits from its investment in Apple, Buffett suggested that investors would later value the decision to secure these profits at a lower tax rate.
Despite selling over 389 million shares of Apple, it still makes up approximately 29% of Berkshire’s portfolio.
Fully divesting from Berkshire’s investment in media stock. Paramount Global is a company. ( PARA 0.64% ) It was not unexpected. At the yearly shareholder gathering where Buffett speculated about the potential increase in corporate tax rates, he also mentioned that He was the only one who sold the remaining 7.5 million shares of Paramount. that had been retained until March 31 – and with a significant decrease in value!
Similar to many traditional media firms, Paramount has had to pivot towards streaming services due to the increasing trend of people cancelling their cable subscriptions. However, the process of expanding their collection of streaming content has been difficult and has negatively impacted the company’s financial performance.
Paramount is an uncommon disappointment for Warren Buffett.
One of the most significant revelations during the 13F season is the total sale of Berkshire’s investment in a cloud data-warehousing company. Snowflake ( SNOW 2.64% ) .
To clarify, Warren Buffett did not make the decision to buy this. It is probable that Buffett lacks knowledge about cloud data-warehousing. The decision to sell this stake, which was originally purchased at Snowflake’s, was likely made by Todd Combs and/or Ted Weschler. The first sale of stock by a company to the public is known as an initial public offering (IPO). cost from four years prior.
Although Snowflake has distinct competitive benefits. Since going public, Snowflake’s rate of growth has significantly decreased, and its valuation has stayed high. With the stock market being historically expensive, Snowflake is at risk of experiencing a significant drop in value. The Nasdaq Composite index rolls over.
Global oil supply constraints, among other macroeconomic factors, have contributed to the increase in the current price of crude oil. The current price of WTI crude oil. data by YCharts .
Buffett and his team once again slightly decreased their company’s investment in the oil and gas giant for the second quarter in a row. Chevron ( CVX 0.82% ) .
Since the start of this century, energy stocks have typically had a limited impact on Berkshire’s investment portfolio. However, Buffett and his team have been consistently increasing Berkshire’s investment in this sector. Occidental Petroleum is a company involved in the oil and gas industry. , which was referred to as a “temporary” holding In the most recent yearly letter to shareholders from Buffett, it appears that there could be a decrease in the Chevron investment. This suggests that Berkshire’s top investment experts might be looking to avoid further involvement in the oil and gas sector while focusing on increasing their investment in Occidental.
However, with Overall, larger-scale elements are favoring an increase in the current market price of crude oil. It would be unexpected to witness Buffett significantly decrease his company’s investment in Chevron.
Credit: Getty Images.
One of the most puzzling decisions made by Berkshire in its 13F filing was the divestment of 2.65 million shares of a credit-services firm. Capital One Financial Corporation ( COF 2.42% ) .
Buffett is typically seen as a huge supporter of well-known stocks with high intrinsic value the world of finance Currently, Capital One’s shares are trading below their book value and offer a good buying opportunity. the ratio of a stock’s current price to its earnings With a rate hike of 8.6%, the company has capitalized on the most significant increase in interest rates seen in the last forty years.
One possible reason why Buffett & Co. reduced their investment in Capital One could be related to the increasing trend of consumers failing to pay their credit card debts on time. Data from the Federal Reserve Bank of New York shows that the percentage of credit card debt that was seriously overdue (90 days or more) rose to 7.18% in the second quarter, compared to 5.08% in the same quarter of the previous year.
The decrease in the number of shares by approximately 802,100 Floor & Décor ( FND 1.98% ) The resemblance to Snowflake suggests that it is likely influenced more by Combs and Weschler than by Buffett.
Floor & Décor is a corporation that Originally, experienced an advantage from a quick increase in interest rates. As mortgage rates increased, this created an opportunity for the company to benefit from individuals opting to renovate their current homes instead of moving.
Regrettably, the appeal of operating in a high-interest rate setting has diminished. CEO Tom Taylor has warned that the increased rates are having a negative effect on the amount of money being spent on hard surface flooring, causing Floor & Décor’s revenue growth to slow down significantly. Although the company has strategies that could help increase its profits, the fact that its forward price-to-earnings ratio is 51 cannot be ignored.
The sharpest increase in interest rates in forty years caused a significant drop in existing home sales in the U.S., leading to an advantage for homebuilders and their suppliers. Sales of previously owned homes in the United States data by YCharts .
Excluding Apple, Paramount, and Chevron, the selling activity at Berkshire was revealed through the operating results and comments from Buffett. I believe the reduction in the siding solutions provider was the most predictable. Louisiana-Pacific Corporation ( LPX -0.51% ) .
Last week, I It was suggested that Buffett and his investment team would sell off this entire investment. With the anticipation of the Federal Reserve starting a cycle of lowering interest rates in September.
When mortgage rates increased significantly, it caused the existing-home sales market to stagnate and created an opportunity for suppliers of homebuilders, such as Louisiana-Pacific, to prosper. However, if mortgage rates decrease, the appeal for homebuilders and their suppliers is expected to diminish.
Telecommunication companies are recognized for carrying a substantial amount of extended debt on their financial records. Total long-term debt of TMUS on an annual basis. data by YCharts .
In the quarter ending in June, Warren Buffett sold the eighth stock from his portfolio. telecom titan T-Mobile ( TMUS 0.52% ) .
Warren Buffett, also known as the Oracle of Omaha, has a mixed history with telecom companies and typically doesn’t keep them in his portfolio for long periods. T-Mobile’s impressive sales growth has decreased in recent years, and the company’s long-term debt has slightly increased since the start of the pandemic.
Despite the decrease in revenue growth, T-Mobile’s earnings per share and adjusted metrics have remained strong. free cash flow Free cash flows (FCF) are increasing. considerably Quicker than competing telecommunications businesses. A historic $4.4 billion in free cash flow during the second quarter could be attractive to Buffet, Combs, and Weschler to remain involved.
Liberty Live Group is a tracking stock owned by Liberty Media that represents its ownership in Live Nation Entertainment. LYV data by YCharts .
Lastly, Warren Buffett and his team of investors were in the position of selling. Freedom Live Group ( LLYV.K 1.80% ) ( LLYV.A 2.05% ) In the second quarter, there were slight decreases (less than 2%) in both the Series A and C shares, likely due to selling by Todd Combs or Ted Weschler.
Liberty Live Group is a subsidiary of Liberty Media, serving as a means to monitor Liberty Media’s significant investment in the company. Live Nation Entertainment is a company that operates in the live events industry. , the company that owns Ticketmaster. Berkshire acquired its ownership in Liberty Live Group through a spinoff. Since Buffett, Combs, and Weschler did not buy shares of this tracking stock at first, it is not unexpected for them to occasionally sell or take profits.
