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Buffett's More Aggressive Slash of Q3 Holdings: Apple and BAC Were Victims, but Rarely Bought Those Two Stocks

Wallstreet InsightFriday, Nov 15, 2024 2:02 am ET
2min read

According to the disclosure by SEC, Warren Buffett's Berkshire Hathaway just submitted its third-quarter holdings report (13F) for the period ending September 30 on Thursday. The Omaha-based conglomerate took new stakes in Domino's Pizza (DPZ) and swimming pool supplier Pool Corp. (POOL) while continuing to trim positions in longstanding holdings Apple (AAPL) and Bank of America (BAC).

As of the end of the third quarter, the total market value of Berkshire Hathaway's holdings amounted to $266 billion, down slightly from $280 billion in the previous quarter. During this period, the Buffett-led conglomerate bought $1.5 billion worth of stocks while selling $36.1 billion, netting a sale of $34.6 billion in publicly traded stocks.

Berkshire's top ten holdings accounted for 89.68% of the total market value. These top holdings include Apple, American Express, Bank of America, Coca-Cola, Chevron, Occidental Petroleum, Moody's, Kraft Heinz, Chubb Insurance, and DaVita.

In the third quarter, Berkshire bought nearly 1.3 million shares of Domino's Pizza, valued at nearly $550 million, and added a 404,000-share stake in Pool Corp., valued at $152 million. Shares of both Domino's and Pool surged in extended trading on Thursday after the investments were made public.

Conversely, Berkshire's top five sell-offs included Apple, Bank of America, Liberty Sirius XM Group Series C (LSXMK), Liberty Sirius XM Group Series A (LSXMA), and Floor & Decor (FND).

Berkshire has steadily reduced its stake in Apple, trimming it from nearly $175 billion at the start of the year to about $70 billion by the end of September. Despite this, Apple still represents about a quarter of Berkshire's $266 billion equity portfolio, its share of the total holdings dropping from 30.09% last quarter to 26.24%.

Berkshire's reduction in its Bank of America stake was nearly 23%, bringing its holding down to 10.4% by the end of the quarter. It is noteworthy that regulatory filings indicate Berkshire has continued to reduce its stake in Bank of America into October, falling below the critical 10% disclosure threshold.

In addition, Buffett sold the remainder of Berkshire's stake in Floor & Decor Holdings last quarter after reducing it in the prior quarter. He also slashed his stake in cosmetics chain Ulta Beauty (ULTA), selling more than 95% of his holdings after initiating the position in the second quarter. Additionally, he reduced stakes in Capital One Financial (COF), Charter Communications (CHTR), and fintech firm Nu Holdings (NU).

Aerospace firm Heico Corp. (HEI) was the only existing position that Buffett added to during the quarter, purchasing 5,445 shares to bring his stake to about 1.05 million shares, worth over $200 million.

Earlier this month, Berkshire's Q3 earnings report revealed that after reducing its stakes in Apple and Bank of America, Berkshire Hathaway's cash reserves grew by $48 billion, reaching a record-high $325.2 billion.

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MARYANA PILLAR
11/15

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MARYANA PILLAR
11/15

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User avatar and name identifying the post author
11/15

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ethereal3xp
11/15
Intel 18A: What Could Go Wrong? We know Intel struggled, but what could potentially go wrong with 18A? Intel received the latest machines from ASML last year, using them for 18A, similar to TSMC for AMD, Apple, and others. Lunar Lake combines Intel's design expertise with TSMC/ASML's fabrication capabilities, albeit with lower margins due to the latter. Surprisingly, Lunar Lake has performed well, showcasing Intel's design capabilities. With 18A, Intel will have everything in-house. So, what could go wrong? One potential issue is the time it may take for Intel to catch up in terms of fab capacity using ASML machines. However, we will eventually get there. In terms of competition, AMD may face lower margins due to TSMC, slower time-to-market, and lower quantities. Qualcomm may have compatibility issues and still need to address ARM-related concerns. Nvidia, although capable, may need some time and face compatibility issues like Qualcomm. These factors may not be dealbreakers, but they are worth considering. Another concern for Intel is its organizational issues, such as restructuring and reorganization. The company may struggle to get out of its mess and address related expenses. Additionally, Intel may face financial constraints, require government funding, and deal with time pressures in building fabs. Intel also lacks EUV experience and may face years of low yields. Contradicting opinions argue that Intel's market cap is lower than AMD's, despite AMD having in-house design capabilities only. While Intel has more GPU assets, they are relatively insignificant compared to giants like Nvidia. In the world of IGPUs, it seems Intel is on par. Some hope for a short-term boost comes from the possibility of a new CEO. Could this propel Intel back into the market with some immediate gains? Finally, the question remains: is Intel's current dirt-cheap pricing a real risk? Or is it not as bad as it seems?
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moneymonster420
11/15
What will be the closing price of $BAC, 46 or 45?
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ROSE MARK
11/15

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pimppapy
11/15
Been holding Berkshire for years, and moves like these make me question. Apple was a staple, now it's shrinking... What's the long game here?
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urfaselol
11/15
$325.2 billion in cash reserves? That's just sitting there waiting to be put to work. When will we see some meaningful acquisitions, Buffett?
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infinitycurvature
11/15
Just watched my BAC shares take a hit. Thanks, Mr. Buffett... I think? Here's to hoping those new stakes in DPZ and POOL will make up for it (and my Ulta Beauty regret)
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DisabledScientist
11/15
Trimmed Apple and BAC? No problem, folks! They're just making room for the next winners. Domino's Pizza, here comes the surge!
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Ok-Memory2809
11/15
Yes! More aggressive moves from Berkshire! Hoping this means they'll shake things up and take us to the next level!
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cfeltus23
11/15
Interesting to see the reduced stakes in Apple and BAC. Anyone have insights on what might be driving this strategy? Is this a long-term play or a sign of market volatility concerns?
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MysteryMan526
11/15
Well, I guess you could say Buffett 'killed' his stake in Floor & Decor and Ulta Beauty. On a more serious note, curious to see how DPZ and POOL play out
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Historical_Hearing76
11/15
$266 billion in holdings, and they're barely buying anything. What's the strategy here? Feeling a bit uneasy about my Berkshire stocks...
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InevitableSwan7
11/15
Why reduce the stake in Apple and BAC? Those are solid investments. Hope Buffett knows what he's doing, don't want to see our portfolio suffer
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Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
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