Berkshire Hathaway's Bold Move: Trims Apple and Bank of America, Bets Big on Domino's Pizza and Pool Corporation
1min read Berkshire Hathaway, led by renowned investor Warren Buffett, recently disclosed its third-quarter portfolio adjustments, revealing significant modifications in its holdings. Notably, the conglomerate reduced its positions in tech giant Apple and financial behemoth Bank of America, while initiating new stakes in Domino's Pizza and Pool Corporation.
At the end of Q3, the total market value of Berkshire's holdings had decreased to $266 billion, down from $280 billion in the previous quarter. The portfolio reshuffle involved building new positions in two stocks, increasing stakes in another two, fully divesting from three stocks, and trimming positions in six others.
Despite remaining the largest position in the portfolio, Berkshire's substantial reduction in Apple shares captured significant attention. The holding now stands at 300 million shares, valued around $69.9 billion, reflecting a 25% reduction from the previous quarter. This marks a notable decrease from the beginning of the year, when Berkshire held 905 million Apple shares.
Berkshire also scaled back its stake in Bank of America, decreasing its position to approximately 766 million shares, valued at $32.3 billion. This modest reduction of 1.12% brings Buffett’s holding just below the crucial 10% disclosure threshold.
On the other hand, Berkshire's seeming shift in strategy included the establishment of new positions in Domino's Pizza and Pool Corporation. The conglomerate acquired about 1.3 million shares in Domino's, translating to a 3.6% ownership valued at approximately $550 million. Additionally, it purchased a 1% stake in Pool Corporation, valued at roughly $152 million.
The market reacted promptly to these strategic acquisitions, with Domino's Pizza shares jumping 6.9% and Pool rising 5.7% in after-hours trading following the announcement.
Simultaneously, Berkshire divested more than 96% of its stake in Ulta Beauty, a position it had only established in August. The announcement of this divestment coincided with a 3.8% decline in Ulta's share price in after-hours trading.
Throughout the third quarter, Berkshire liquidated $34.6 billion worth of stock investments. Notably, the company refrained from repurchasing any of its own shares, marking the first such occurrence since 2018. As a result, Berkshire’s cash reserves soared to a record high of $325.2 billion, making up 28.34% of its total assets.
Buffett’s investment philosophy remains unaltered despite these shifts. He previously remarked, “We are eager to spend our cash reserves, but only if we believe the investments carry minimal risk and offer substantial returns.”