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Warren Buffett remained a net seller of stocks and slowed the pace of Berkshire Hathaway (BRKB) share buybacks in the second quarter, even as the global market continues to grow.
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On Saturday, the holding company released its second quarter report, which showed net share sales of $ 1.1 billion. While this is down from $ 3.9 billion in the first quarter, it is the third consecutive quarter of net share sales.
A regulatory filing later in August will detail second quarter buying and selling.
Nonetheless, the value of Berkshire’s overall equity portfolio rose 8.7% to $ 293.8 billion at the end of the second quarter, from $ 270.4 billion in the first quarter, as the S&P 500 and the Nasdaq hit new highs to end the quarter.
Meanwhile, Berkshire bought $ 6 billion of BRKB shares in the second quarter, having bought back $ 6.6 billion in the first quarter and a record $ 27.4 billion in 2020.
After avoiding buybacks for years, Berkshire relaxed the buyback rules in 2018. And Berkshire Hathaway shares have become one of Buffett’s main buys, with investment legend calling it “a simple way to investors to own an ever-growing share of outstanding companies. “
While aggressively pursuing buyouts, Berkshire has remained silent on making deals. Buffett organized large-scale mergers and acquisitions during and after the 2008 financial crash. But soaring prices, fueled in part by specialist acquisition firms on the prowl for public private companies, keeps Buffett on the sidelines.
Amid the shortage of major acquisitions, Berkshire’s liquidity remained strong, falling to $ 144.1 billion in the second quarter, from a near high of $ 145.4 billion in the previous quarter.
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Warren Buffett Shares
Berkshire Hathaway shares rose 1.9% to 285.63 on Friday stock trading, breaking the 50-day line. BRKB stock has a flat base with a buy point of 295.18, according to MarketSmith chart analysis. Friday’s move above the 50-day line offered early entry, if not for impending gains. But the BRKB share could be exploitable on Monday.
Buffet’s stock portfolio remains heavily concentrated in a handful of companies. In the second quarter, 69% of his overall value was made up of Apple (AAPL) ($ 124.3 billion), Bank of America (BAC) ($ 42.6 billion), American Express (AXP) ($ 25.1
billion), and Coke (KO) ($ 21.6 billion).
Holdings of Berkshire shares contributed a 6.8% gain in total second-quarter profits to $ 28 billion. Excluding the portfolio, operating profit climbed 21% to $ 6.69 billion, beating Wall Street estimates for a gain of 10%, led by its industrial activities.
Burlington Northern Santa Fe, one of North America’s largest railroads, posted a 28% gain to $ 2.22 billion. It came after the rival Pacific Union (UNP) posted a 50% rise in second-quarter operating profit in July, saying it moved increasing volumes as pandemic headwinds abated.
Insurance operations, including Geico, saw lower profits as claims rose dramatically against a backdrop of increased driving and other business.
The second quarter report did not reveal any details on the exact timing of Berkshire’s leadership renewal. In May, Buffett confirmed that Greg Abel, who heads Berkshire’s non-insurance business, will eventually succeed him.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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