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Warren Buffett’s Berkshire Hathaway announced two major new investments on Tuesday, revealing an $ 8.6 billion stake in phone company Verizon Communications and a $ 4.1 billion stake in oil company Chevron.
The investments were disclosed in a regulatory filing detailing Berkshire’s U.S.-listed shares as of December 31.
Berkshire also unveiled a new $ 499 million stake in professional services firm Marsh & McLennan.
To make room, Berkshire has cut back on investments in several companies, including Apple, although at around $ 121 billion, the iPhone maker remains by far its largest stockpile of common stocks.
Verizon shares rose 3%, Chevron rose 2.2% and Marsh was left unchanged in after-hours trading after the Berkshire filing.
Tuesday’s filing signals where Buffett and his portfolio managers Todd Combs and Ted Weschler see value, although Buffett normally manages larger investments.
It also shows that Berkshire is finding ways to deploy its cash reserve, which totaled $ 145.7 billion as of September 30.
The Omaha, Nebraska-based conglomerate owns more than 90 businesses, including Geico auto insurance, BNSF railroad and Dairy Queen ice cream, but has spent five years since its last big takeover, a purchase of $ 32.1 billion from Precision Castparts.
Berkshire had started investing in Verizon, Chevron and Marsh in the third quarter of last year and had obtained permission from the Securities and Exchange Commission to delay disclosure of the issues.
Over the years, the SEC has allowed Berkshire to quietly invest in companies on several occasions, to keep investors from profiting from Buffett’s bets and pushing up company share prices before Berkshire bought.
Tuesday’s filing showed Berkshire, a major investor in Bank of America, is scaling back its smaller banking competitors, reducing its stake in Wells Fargo, and abandoning JPMorgan Chase, M&T Bank and PNC Financial Services Group Inc.
Berkshire also invested more in drugmakers Abbvie, Bristol-Myers Squibb, and Merck & Co. while selling a small stake in COVID-19 vaccine maker Pfizer Inc. It also ditched mining company Barrick Gold Corp.
Doug Kass, managing partner of Seabreeze Capital Investment in Palm Beach, Fla., Said Verizon’s stake “made sense” to Berkshire, reflecting the phone company’s dividend payments and the company’s earnings growth prospects. wire.
Lower banking stakes may reflect Buffett’s concern about persistently low interest rates and coronavirus-related loan losses, Kass added.
Berkshire is expected to provide more details on its investments when it releases year-end results and Buffett’s annual letter to shareholders on February 27.
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